In late 2013, the Shareholders of Agropharm Limited contacted Leith M&A as part of their future planning process. Managing Director, David Nelson was invited to meet with the Shareholders of the Company and discuss their plans at length. The team at Leith M&A sent a thorough appraisal of Agropharm Limited for their inspection, detailing the potential value of the Company and market conditions, plus information regarding the process Leith M&A would undertake to help sell the Company. The Shareholders of Agropharm Limited decided that Leith M&A were the right fit for them due to our dynamic and personable approach. They also recognised that, by the nature of our business model, we would work incredibly hard to see a deal through to completion.
Once briefed at length, the Research team created comprehensive sale documents in collaboration with the key financial and operational Directors in preparation for marketing Agropharm Limited. In tandem with this, the crucial research process was also carried out. The team identified a possible 70 UK and international manufacturers of agro chemicals which fitted the target buyer criteria from both a strategic, financial and geographical perspective. Alongside this and as part of the research process Leith M&A identified a number of industry specific private equity groups. Once signed off, the Research team worked with tenacity and creativity to make contact with the shareholders of these companies, resulting in eight interested parties remaining following site visits, multiple meetings and requests for in depth information. Leith M&A were pivotal to this process as the conduit for all interested parties, streamlining the process and making it as smooth as possible, chairing all meetings and supporting our client in the complexities of all negotiations.
Mid 2014 saw three interested parties making attractive offers which the shareholders gave due consideration to, culminating in Heads of Terms being signed by PelGar International in December 2014. Between this time and the deal completing in May 2015 David Nelson supported the Shareholders during an exhaustive due diligence exercise working closely with the advisors to PelGar and Agropharm’s external auditors. Leith M&A were also instrumental in the appointment of trusted legal advisors.
Gareth Capel-Williams, Managing Director, PelGar International comments “Agropharm offers a wide range of quality products and marketing solutions for the retail, professional pest control, public health and crop protection markets. This acquisition provides an excellent synergy with the PelGar product range and customer base. In particular, Agropharm’s natural pyrethrum range will help to boost our market share in the international pest control and agricultural sectors.”
Both companies have extensive international business with very limited overlap of territory and distribution. The Agropharm products will expand PelGar’s portfolio in the home and garden and crop protection markets, as well as allowing PelGar to introduce their range of highly effective rodenticides and insecticides to Agropharm’s existing customers.
Susan Amass, Shareholder of Agropharm comments, “Thank you. We are so grateful that you were there to guide us through with this sale and we are quite certain it wouldn’t have happened without Leith M&A”.
What challenges arose? How did you navigate them?
Attracting interest in this deal was never an issue, the company traded its unique products across several continents and the organic pesticide market is flourishing globally, so interest levels were high from the outset. We were able to attract an unusually high number of competitive bids from major global agrochemical corporations.
However, the due diligence phase was particularly challenging. The industry is subject to very stringent EU regulations (REACH) and so the paperwork involved was daunting to say the least. The deal also included leasehold offices in Buckinghamshire, multiple overseas subsidiaries, international agent agreements and a freehold manufacturing site in Shropshire that has previously been used as an MOD testing sight during WWII. This meant we had to overcome many trading obstacles as well as ensuring that sufficient environmental tests had been carried out on the site in Shropshire and adequate insurance cover was in place to protect the outgoing Shareholders against any future claims arising from the historical usage of the site.