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Azoty finalizes €227 million acquisition of German fertilizer Compo Expert

Grupa Azoty has closed the acquisition of German specialty fertilizers producer Compo Expert Group for €9m less than the maximum possible price, but Raiffeisen Centrobank (RCB) said that non-transparency over acquired debt in the agreement remained a big worry.

The completion of the transaction for €226.6m was announced in late November.

Grupa Azoty’s market capitalisation slumped after announcing the intended acquisition in early September.

Following the company’s communication about Compo’s acquisition on Tuesday, its shares were again under pressure.

Dominik Niszcz, a chemicals equity analyst at investment bank RCB, told ICIS: “I believe that yesterday’s news about approvals was neutral for the stock.

“The final price could be seen slightly positively (€9m below the maximum price implies zloty (Zl) 0.5 [$0.13] per share of Grupa Azoty), but we still do not know what the level of debt of Compo is, so the information about the equity price is still of limited value for analysts.”

On Tuesday, by 17:00 Warsaw local time, Azoty’s share price on the Warsaw Stock Exchange was 4.3% down compared to the previous close at Zl 30.68.

In a written response provided to ICIS in early October, after RCB first raised concerns at the lack of information on debt in the deal, Azoty said “debt ratios will increase, but in the scope” of the company’s financing plan.

Compo Expert Group manufactures what it describes as high added-value specialty fertilizers for professional use in the markets of Asia, Europe, the Americas and South Africa.

The company’s key production assets are located in Krefeld, Germany, and Vall d’Uixo, Spain.

Among other products, Compo Expert produces controlled release fertilizers (CFR) and slow release fertilizers (SRF), fertigation and foliar fertilizers, liquid fertilizers and biostimulants.

It also produces specialty nitrogen, phosphorous, potassium (NPK) fertilizers with a high nutrient concentration.

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