Origin Enterprises announces that it has acquired United Agri Products Limited (UAP) and Rigby Taylor Limited (RT).
UAP builds upon Origin‟s core position in the provision of integrated crop production systems to primary food producers. Rigby Taylor extends the Group‟s offering into new channels.
UAP, based in the United Kingdom, is a premier provider of agronomy services to arable, fruit and vegetable growers. The business services over 8,000 farm enterprises through a team of 100 agronomists. UAP provides tailored systems incorporating advice on crop selection, establishment, nutrition, protection and precision agronomy combined with the sale and distribution of strategic inputs.
Under the terms of the transaction Origin has acquired 100 per cent of UAP based on an enterprise value of £33 million and the delivery of average working capital. Further consideration of £4 million will be paid in March 2013. Turnover for the year ended 1 August 2010 was £111.3 million and operating profit before goodwill amortisation amounted to £5.9 million.
Rigby Taylor, also based in the United Kingdom, is a leading service provider supplying advice and technical product solutions to the professional sports turf, landscape and amenity sectors. The business delivers an important complementary extension to the Group‟s technology platform, product portfolio and distribution network.
Under the terms of the transaction Origin has acquired 100 per cent of the share capital of Rigby Taylor for an initial consideration of £9.2 million. Deferred consideration of up to £1 million will be paid based upon the achievement of specific profit targets. Turnover for the year ended 30 November 2010 was £22.7 million and operating profit amounted to £1.52 million.
The acquisitions are being funded from existing bank facilities and are expected to be earnings enhancing from the date of acquisition contributing approximately 3.5 cent per share in the period to 31 July 2011 reflecting the seasonality of these businesses.
Commenting on the announcement Tom O‟Mahony, CEO of Origin said: "We are delighted with the acquisitions of UAP and Rigby Taylor which are two highly focused businesses with a dedicated commitment to customer service and quality. UAP plays a pivotal role in supporting on-farm decision making and product specification for the benefit of primary producers."
"UAP will provide customer extension opportunity for the Group's integrated service offering as well as enabling the development of new innovative service propositions. The acquisitions represent an excellent strategic fit for the Group and reinforce Origin‟s commitment to building scale, systems and processes around the key elements that support profitable and sustainable farming systems in addition to facilitating access to new market opportunities."
Commenting on the acquisition of UAP by Origin Stephen Derbyshire, Managing Director of UAP said: "The transaction represents a defining milestone in the development of UAP. In Origin we have found an organisation that has demonstrated a tangible track record in supporting the primary sectors of the food industry. UAP will become an integral part of a leading organisation committed to delivering sustained value to farmers through its technical ability, substantial resources and a commitment to new technology."