PGW
15/07/2015 09:41
ASSET
PRICE SENSITIVE
REL: 0941 HRS PGG Wrightson Limited
ASSET: PGW: PGG Wrightson Acquires Strategic Interest in Uruguay
PGG Wrightson has agreed to purchase fifty percent of the shares of
Agrocentro Uruguay with a target settlement date of 31 August 2015. The
transaction involves an upfront payment and a capped earn out component over
the next three years based on the performance of the business.
Agrocentro Uruguay is a rural servicing company that commenced business in
the East of Uruguay in early 2007. It was established to provide
agricultural sales, support and rural services focused on achieving improved
profitability for farmers. It has four different business units consisting
of retail and distribution of agricultural inputs, farming, logistics and
consulting. The business has approximately 120 staff, including 28
agronomists and veterinarians and a very proactive and skilled management
team. Agrocentro Uruguay currently has eight retail branches and is well
configured for further growth.
Agrocentro Uruguay pioneered the development of advanced technology systems
in meat production and forage based seed production and is a market leader in
the sale of inputs and services. The business has achieved impressive
growth. PGG Wrightson Seeds has been a key strategic partner and has
supported Agrocentro Uruguay from its conception. Agrocentro Uruguay is PGG
Wrightson Seeds' largest customer in South America. It is also the biggest
seed producer for PGG Wrightson Seeds and an important seed processor.
PGG Wrightson's Group General Manager of Seed & Grain, John McKenzie said
"this investment makes good strategic sense for both parties. We have had a
long standing and successful relationship and we understand the business. We
have common goals for the future and this alignment of interests sets the
business up well for future growth and complements PGG Wrightson's existing
South American operations very well."
PGG Wrightson's Chief Executive, Mark Dewdney commented that "the transaction
presented PGG Wrightson with the opportunity to consolidate the growth the
business has experienced in South America while importantly also creating a
platform for future growth. The transaction secures a strong position in
retail distribution while also cementing a key strategic alliance. It aligns
with our growth strategy for South America and also complements the recent
investment we have made in the construction of our new warehousing and
logistics facilities in Montevideo."
Mr McKenzie noted that "following settlement, PGG Wrightson and Agrocentro
Uruguay will continue operating as they do today, as two separate companies.
However, the businesses will work together collaboratively to consolidate
their operations where this makes sense to provide better and more efficient
service to farmers. We expect that this strengthening of our partnership
will in time result in improved services, logistics, product development,
technology transfer and new business that will help to develop and grow the
Uruguayan agricultural sector.
Further information:
Mark Dewdney, Chief Executive
Phone: 027 248 3151
John McKenzie, Group General Manager, Seed & Grain
Phone: 027 222 5434
End CA:00267017 For:PGW Type:ASSET Time:2015-07-15 09:41:06
