FMC Corp., the world’s fifth-largest farm pesticide maker, said Wednesday that it has received a $400 million investment from Belgium’s Tessenderlo investment group, ending a “strategic review” and concluding inquiries into the potential sale of the company, based in the FMC high-rise tower on Philadelphia’s Schuylkill riverfront. .
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Tessenderlo agreed to pay $13.30 a share for a 20% stake in publicly traded FMC. That’s a modest premium to FMC’s recent trading price but less than the share value as recently as June 1. The stock rose as much as 1.6% in early trading Wednesday before slipping back toward Tuesday’s close of $11.50.
FMC traded at over $120 a share in early 2022 but has since lost most of its value, with crop-protection sales growth slowing worldwide amid slow progress on regulatory approval and marketing for new products to offset last year’s expiration of patent protection on the company’s best-selling Rynaxypyr insecticide.
The buyer expressed faith in FMC’s next-generation fungicides, herbicides and insecticides.
“FMC offers an attractive opportunity to invest in a business with meaningful long-term potential, driven by a new generation of proprietary molecules that are renewing its portfolio and strengthening its competitive position,” Luc Tack, chief executive of publicly traded Tessenderlo Group, said in a statement.
That includes products developed at the company’s Stine research labs in Newark, Del., which FMC acquired from DuPont Co. in 2017 as DuPont spun off its farm chemicals and seed business into Corteva.
FMC “perfectly aligns” with Tessenderlo’s farm businesses, Tack added. Tessenderlo gets a seat on FMC’s board as part of the deal.
Those include Kerley, an Arizona-based farm fertilizer maker and niche pesticide distributor; sulfur-based fertilizer maker Tiger-Sul, based in Connecticut; and French organic fertilizer developer Violleau.
Other Tessenderlo investments include plastics, chemicals, industrial machinery, electronics, and animal-byproduct (“bio-valorization”) businesses.
FMC’s board approved Tessenderlo’s investment after a “comprehensive and deliberate” process, which the company started in February with its investment bankers and lawyers, as the best way forward for the company and its shareholders, said Pierre Brondeau, FMC board chairman and chief executive.
The $400 million inflow is the last piece in FMC’s efforts to reach Brondeau’s debt-reduction and cash-boosting targets, so the company can more easily remain independent until its new products get to markets.
Other recent steps by FMC included renegotiating its credit agreements; raising $1.2 billion in a junk-rated bond offering; selling its India commercial business for around $250 million; a $200 million deal to supply key products to its larger rival, Corteva, which is moving its headquarters from Wilmington to Indiana; and selling the 250-acre Stine Research Center to a unit of New York-based real estate investor Broadstone Net Lease Inc., while leasing back part of the property for continued research.
These actions, plus reduced debt and increased cash, put FMC “on a path to growth,” Brondeau said.
FMC employs around 5,500 worldwide, including around 300 at its headquarters and 330 at the Stine research and development center.
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