Origin Enterprises to buy UK firm

Origin Enterprises is to buy UK-based fertiliser company CM Fertilisers as it expands its nutrition services business.

Origin will acquire the firm, which is owned by Carrs Milling Industries and mainly operates in Scotland and the north of England, for an equity consideration of £19 million (€21.5 million), along with the working capital related debt at completion, estimated to be £5.9 million (€6.7 million).

CM Fertilisers provides specialist fertilisers and integrated nutrient management systems for arable, grassland, horticulture and forestry sectors. Origin said the acquisition would help develop its position in the provision of sustainable agricultural technologies.

The sale must be approved by Carrs Milling shareholders at a meeting next month, and is expected to be completed shortly afterwards.

In the year ended August 2010, CM Fertilisers had turnover of £59.3 million (€67.1 million) and earnings before interest and tax of £1.9 million (€2.2 million). It is expected to add to enhance Origin's earnings from the date of completion.

The company said the acquisition would be funded from existing bank facilities.

"This acquisition builds upon Origin's commitment to create customised value propositions that meet farmers' needs through new service applications providing for the maintenance of soil fertility and the sustainable improvement to plant nutrition along with an enhanced procurement capability facilitating strategic opportunity to reduce the impact of input price volatility," said Origin chief executive Tom O'Mahony.

Origin was recently granted approval to buy British company United Agri Products, which it said in March it would buy for an enterprise value of £33 million (€37.3 million). The company also announced that month it would buy Rigby Taylor, a UK firm which supplies products to the sports turf, landscape and amenity sectors, for an initial consideration of £9.2 million (€10.4 million).