Signing of definitive agreement to sell South American fertilizer business to Mosaic
Pursuing sale of global chocolate business
Acquisition of remaining stake of global grains business Toepfer
DECATUR, Ill.--(BUSINESS WIRE)-- Archer Daniels Midland Company (NYSE: ADM) today announced three significant actions in the company’s ongoing portfolio management: an agreement to sell the company’s South American fertilizer business, pursuit of the sale of the company’s chocolate business, and the acquisition of the remaining stake of Alfred C. Toepfer International GmbH.
“We are committed to ongoing portfolio management to realize value from our businesses and to deploy our capital where it can best improve returns,” said ADM Chairman and CEO Patricia A. Woertz. “The actions we are announcing today are results of this continuing process. Each of these transactions will help ADM continue to improve returns and create shareholder value.
“These actions complement recent demand-driven strategic investments, such as our $250 million high-value protein facility in Brazil,” Woertz added. “We are taking action to realize returns today and positioning ourselves for continuing profitable growth around the globe in the future.”
Agreement to Sell Brazil and Paraguay Fertilizer Business
ADM has signed an agreement to sell its fertilizer business in Brazil and Paraguay to The Mosaic Company (NYSE: MOS) for $350 million. The transaction consists primarily of five ADM-owned blending facilities in Brazil and Paraguay. The purchase price includes $150 million in working capital. As part of the transaction, ADM will purchase fertilizer from Mosaic after the closing and will continue to supply certain fertilizer customers in Brazil and Paraguay. The proposed sale will be contingent on customary regulatory approvals.
“Our fertilizer team has done a good job building the business since we purchased our first blending facility in 1997,” said Woertz. “But the lengthy value chain inherent in the fertilizer business, along with strong competition from fully integrated companies that have entered the sector, has made it difficult for this business to consistently meet our return objectives. By selling our blending assets—while retaining our distribution business—we will be improving our returns while maintaining our important origination relationships with key growers in Brazil and Paraguay.”
Pursuit of Sale of Chocolate Business
ADM will pursue the sale of its chocolate business, while retaining the majority of its cocoa press operations. The company has engaged advisers to facilitate the sale process.
“Over the last year or so, we’ve taken significant actions to improve our cocoa business, most notably by significantly reducing invested capital. At the same time, we have also seen industry conditions improve as crop supplies have returned to normal,” said Woertz. “Given improved underlying conditions and the success of our efforts to reduce capital intensity, we see a promising outlook for the cocoa press business and believe it will meet our returns objectives.
“We had extensive negotiations with a potential buyer regarding the sale of our global cocoa and chocolate business. In the end, we could not agree to an outcome that met ADM’s objectives. Instead, ADM is moving ahead with a process to sell our global chocolate business while retaining most of our cocoa press operations. This approach will position ADM to realize the greatest overall value from these businesses.”
ADM has chocolate manufacturing operations in Hazleton, Pa.; Milwaukee, Wis.; Georgetown, Ontario; Liverpool, U.K.; Manage, Belgium; and Mannheim, Germany.
Acquisition of Remaining Stake in Toepfer
ADM will acquire the remaining 20 percent minority stake of Alfred C. Toepfer International for €83 million, representing about 1.1x net book value. The proposed transaction, which is occurring through the exercise of a put agreement by Union InVivo, will be subject to customary regulatory approvals. Since 2002, ADM has owned 80 percent of Toepfer; InVivo has held the remaining 20 percent since 2010.
“Toepfer has an important presence in critical origination areas as well as growing destination markets,” said Woertz. “For years, ADM has benefitted from our investment in Toepfer. Now, full ownership will allow us to strengthen this business and fully integrate it into ADM’s global origination network.”
InVivo will remain a strategic business partner for ADM in Europe.
City of Decatur Launches Online Tool to Bring in Business,
Boost Existing Business Success
The City of Decatur today launched decaturretail.com, a one-stop hub of information related to local economic development giving both potential and existing businesses immediate access to local market data and information while giving residents a portal to provide immediate input on the development process.
Decaturretail.com features information on local places to dine or shop along with user rankings and a “feedback section” giving residents a place to provide ideas to the city in real time as to what new establishments they’d like to see come to Decatur. Local incentive information and a regularly updated news section are also featured prominently and the site includes a social media component allowing users to “spread the word” about what’s happening in Decatur in terms of development.
The site will also soon have a site selection database giving businesses a way to review and select available local sites for their new businesses.
“The Decatur City Council has made retail recruitment and development a top priority as we work to boost the local tax base and improve the quality of life for both existing and potential residents,” said Mayor Mike McElroy. “But this doesn’t just mean bringing in new business – we also want to help existing businesses to grow and be successful in hopes of keeping them here for years to come.”
At the heart of decaturretail.com sits a free online tool designed to help local businesses grow through data analysis. According to parent company GIS Planning, SizeUp for Local Business Intelligence allows any business to benchmark themselves with competitors by easily obtaining specific data on revenues of businesses in their particular industry, salaries, health insurance costs, supplier locations, and more. This information will help decision makers to decide, among other things, where to advertise and map competitors, customers and suppliers.
The information is not business specific, but specific to individual industries in the local market. In other words, the information doesn’t provide proprietary information and is available to anyone wanting to use it. Specifically, SizeUp for Local Business Intelligence (SizeUp LBI) crunches millions of data points from public and private sources to provide four main tools:
According to Economic Development Officer Patrick Hoban, the information being provided - at no cost - is the same data that major corporations have in market research departments.
“We are, in essence, giving our local businesses, including small mom-and-pop establishments, a market research department,” Hoban said. “Now our business owners can instantly access competitive benchmark, advertising, demographic, industry, geographic, and cost-of-business data that huge corporations use every day.
“The site will also give businesses looking to come to Decatur a means to analyze the local market, select a site, see what incentives might be available and monitor local feedback and get news on all of the great happenings in our city all in one location and at any time.”
According to GIS Planning, SizeUp launched in late 2011 as a TechCrunch Disrupt Battlefield finalist, and was awarded first prize in the Department of Commerce’s Business Apps Challenge in 2012. In September, the U.S. Small Business Administration began using SizeUp on its website to help small businesses.
Contact Patrick Hoban at 217-424-2778 or Billy Tyus at 217-424-2727 for more information.