Origin Enterprises buys United Agri Products Limited and Rigby Taylor Limited

Origin Enterprises Group announced it has purchased United Agri Products Limited (UAP) and Rigby Taylor Limited. Origin expects the acquisition of UAP to leverage upon its core position in the provision of integrated crop production systems to primary food producers. The other acquisition, Rigby Taylor, extends the Group’s offering into new channels.

UAP is a premier provider of agronomy services to arable, fruit and vegetable growers and is based in the United Kingdom. The business services over 8,000 farm enterprises through a team of 100 agronomists. UAP provides tailored systems incorporating advice on crop selection, establishment, nutrition, protection and precision agronomy combined with the sale and distribution of strategic inputs.

Under the terms of the transaction, Origin has acquired 100 per cent of UAP based on an enterprise value of £33 million and the delivery of average working capital. Further consideration of £4 million will be paid in March 2013.

Rigby Taylor, also based in the United Kingdom, is a leading service provider supplying advice and technical product solutions to the professional sports turf, landscape and amenity sectors. The business delivers an important complementary extension to Origin Group’s technology platform, product portfolio and distribution network.

Under the terms of its acquisition, Origin acquired 100 per cent of the share capital of Rigby Taylor for an initial consideration of £9.2 million. Deferred consideration of up to £1 million will be paid based upon the achievement of specific profit targets.

According to Origin, the acquisitions are being funded from its existing bank facilities. The two investments are expected to be earnings enhancing from the date of acquisition contributing around 3.5 cent per share in the period to 31 July 2011, reflecting the seasonality of these businesses, stated the announcement.

Commenting on the announcement Tom O’Mahony, CEO of Origin said the two acquisitions mark a considerable investment move, given their highly focused businesses. UAP plays a pivotal role in supporting on-farm decision making and product specification for the benefit of primary producers, he said. UAP will provide customer extension opportunity for Origin’s integrated service offering as well as enabling the development of new innovative service propositions, added O’Mahony.

Commenting on the acquisition separately, UAP Managing Director, Stephen Derbyshire, said the transaction represents a defining milestone in the development of UAP. He stated that UAP will become an integral part of a leading organization committed to delivering sustained value to farmers through its technical ability, substantial resources and a commitment to new technology.

12th March 2011