Platform Specialty Said to Weigh Agrichem, Industrials Split

Updated on
  • Chemicals maker said to work with advisers on strategy options
  • Split could pave the way for a sale of agrichemical business

Platform Specialty Products Corp., the chemicals maker, is working with advisers to explore strategic options including separating its agricultural and industrial businesses, according to people familiar with the matter.

A split could pave the way for a sale of the agrichemical business, which Platform Specialty has built up through $4.9 billion of acquisitions over the past four years, the people said, asking not to be identified as the details aren’t public. Deliberations are at an early stage and no deal is certain, they said.

The decision to explore options reflects a view inside Platform Specialty that its two distinct businesses -- agricultural and industrial chemicals -- are not correctly valued by the market, the people said. Platform shares are up more than 80 percent in the past 12 months, giving the whole company a market valuation of about $3.6 billion.

The stock jumped as much as 7.3 percent to $13.91, the highest since December 2015, at 2:17 p.m. in New York.

A representative for West Palm Beach, Florida-based Platform Specialty declined to comment.

The global agrichemical industry is going through a period of rampant consolidation, with combinations between Monsanto Co. and Bayer AG, Dow Chemical Co. with DuPont and China National Chemical Corp. and Syngenta AG all in the works. Platform Specialty’s agrichemicals business would likely attract interest from strategic rivals and private equity buyers, the people said.

Platform was founded by serial dealmaker Martin E. Franklin in 2013 and is backed by Bill Ackman’s Pershing Square Capital Management, which owns about 14.5 percent of the company, according to data compiled by Bloomberg. 

The company has grown through a series of acquisitions, including the $3.5 billion purchase of Arysta LifeScience Ltd. from Permira Holdings, announced in 2014. It also brought in Rakesh Sachdev, the former head of Sigma-Aldrich Corp., as chief executive officer in 2015. It came under pressure in the second half of that year amid heavy declines in agricultural commodity prices, with shares slumping to $5.55 last February from a 2014 high of $28.70.

Franklin has carved out a reputation among investors as a value-creating executive. In 2015, he sold Jarden Corp., the consumer-goods company he had built, to Newell Brands Inc. for $15.4 billion.

Elliott Management Corp., the sometimes-activist hedge fund run by billionaire Paul Singer, disclosed a 3.9 percent stake in Platform Specialty this week.

— With assistance by Jack Kaskey

(Updates with Platform Specialty comment in fifth paragraph.)
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