US-based FMC Corporation, a global agricultural sciences company, on Thursday said it has signed an agreement to sell its India commercial business to IPO-bound Crystal Crop Protection Ltd, a crop solutions company in New Delhi, for about $252 million.
“FMC’s innovative portfolio, blockbuster brands and future pipeline give us an opportunity to provide Indian farmers access to innovative products,” Crystal’s chairman and managing director, Ankur Aggarwal, said in a statement. He added that the deal is aimed at accelerating innovation across both chemical and biological domains of crop protection.
FMC will continue to receive all cash generated from the ongoing operation of the India business until closing, primarily through monetization of working capital. The company intends to allocate all proceeds from the sale to reduce debt.
This comes less than a year after the US-based company in July announced its decision to divest its crop protection commercial business in India, enabling it to participate in the Indian market through a new go-to-market approach while deploying resources to its highest-growth opportunities globally.
IPO-ready
Through the transaction, Crystal Crop Protection will acquire FMC India’s crop protection commercial operations, including a licence to FMC brands sold in India. The deal also includes a preferred supply agreement for select FMC active ingredients and formulations, along with preferred access to the company’s crop protection pipeline in India, according to the statement.
Interestingly, the deal also comes amid IFC-backed Crystal’s plans to list in Indian public markets. The company filed its draft papers with the Securities and Exchange Board of India (Sebi) in December to raise about ₹600 crore in fresh issue and an offer for sale by existing shareholders, including the promoters of up to 7,405,387 equity shares.
“We look forward to supporting their (Crystal’s) growth through our supply agreement,” said Pierre Brondeau, FMC chairman, chief executive and president. He added that FMC remains committed to India and will continue to conduct global R&D activities and maintain global manufacturing operations in the country.
BofA Securities acted as exclusive financial adviser for FMC, while EY acted as exclusive buy-side M&A adviser to Crystal.