Biological products, which promote crops’ own abilities to absorb nutrients or fight pests, will account for one-quarter of the agrichemicals market within 13 years, Corteva said, as it unveiled a second takeover in the sector within three months.
Corteva said that the market for biological products – which include the likes of beneficial bacteria, helpful enzymes or pheromones aimed at disrupting pests – was to “grow high-single digits annually”.
That would leave it “representing approximately 25% of the overall crop protection market by 2035”, said the group, as it unveiled the $1.2bn takeover of Texas-based Stoller, which Corteva termed “one of the industry’s largest independent biologicals companies”.
“With operations and sales in more than 60 countries and 2022 forecasted revenues of more than $400m, Stoller brings immediate scale and profitability,” Corteva said.
It reported paying the equivalent of 12 times expected 2022 ebitda for Stoller, implying an ebitda margins above 10%, and which “will be accretive to Corteva”.
Rapid expansion
The Stoller deal represents Corteva’s second takeover in the sector in a little over two months, after the purchase in September of Spain’s Symborg, a specialist in microbial technologies.
Indeed, Chuck Magro, the Corteva chief executive, heralded the development of the group as “one of the largest players” in the biologicals market”.
“In just three years, Corteva has developed a world-class biologicals business,” the company said, citing boosts from research tie-ups and licensing and distribution agreements, as well as from acquisitions.
Guillermo de la Borda, the Stoller chief executive, said that the deal was a “testament to the incredible success and dedication of our teams across the globe who have helped us become one of the most trusted biostimulant and plant health companies in the world.
“Our innovative solutions and deep expertise will continue to make an impact for years to come.”
Corteva shares stood 0.4% higher at $65.81 in afternoon deals in New York.
