Strategic Acquisitions in Agri-Services

RNS Number : 6615C

Origin Enterprises Plc

10 March 2011

 



                  10 March 2011

Origin Enterprises plc

Strategic Acquisitions in Agri-Services.

Origin Enterprises ('Origin' or 'The Group') announces that it has acquired United Agri Products Limited ('UAP') and Rigby Taylor Limited ('Rigby Taylor').  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 Stg£33 million and the delivery of average working capital.  Further consideration of Stg£4 million will be paid in March 2013.  Turnover for the year ended 1 August 2010 was Stg£111.3 million and operating profit before goodwill amortisation amounted to Stg£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 Stg£9.2 million.  Deferred consideration of up to Stg£1 million will be paid based upon the achievement of specific profit targets.  Turnover for the year ended 30 November 2010 was Stg£22.7 million and operating profit amounted to Stg£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."

ENDS

Enquiries:

Brendan Fitzgerald,                                                       Tel: [phone]

Chief Financial Officer             

Origin Enterprises plc

Joe Murray                                                                   Tel:         [phone]

Murray Consultants                                                      Mobile:    [phone]

Goodbody Corporate Finance (ESM Adviser)

Kevin Keating                                                              Tel:       [phone]

Davy (Nominated Advisor)

Ivan Murphy                                                                 Tel:       [phone]

About Origin Enterprises plc

Origin Enterprises plc is a focused Agri-Services Group with strategic investments in Consumer Foods and Marine Proteins and Oils.  The Group is listed on the ESM and AIM markets of the Irish and London Stock Exchanges.  The Agri-Services business through its manufacturing and distribution operations in Ireland, the United Kingdom and Poland has leading market positions in the supply of specialist agronomy services, crop nutrition and feed ingredients.

ESM ticker symbol: OIZ           AIM ticker symbol: OGN

Website: www.originenterprises.com

 

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