Ackman struggling to drum up interest in $4B agrichemical business
Martin Franklin and Bill Ackman’s plan to sell their agrichemical business is in the weeds, The Post has learned.
The investors, who control Platform Specialty Products Corp., have had the company’s agriculture chemicals businesses on the auction block for months but is having a hard time getting serious nibbles at the $4 billion-plus asking price, sources said.
The two decided to put the business on the block earlier this year — hoping to take advantage of the rapid consolidation taking place in the sector, sources said.
But while some private equity firms — including KKR and Blackstone — have kicked the tires, the West Palm Beach, Fla., operation, with Ebitda of about $400 million, has not had much interest from rival firms, sources said.
The giant chemical companies are almost all in the process of merging with each other, making them too busy to consider buying this pesticides division, a source said.
“I think if the seller does not get a certain price they might hold on to it,” the source said.
PSP shares have more than doubled this year, from their $6.85 a share low in January, just before rumors of a possible sale emerged, through April 26, when they hit $14.32.
As the sales process has proceeded, the shares have sold off about 10 percent, to Friday’s close at $12.94.
The company sells pesticides protecting grapes and other fruits and vegetables. Those products make up about half of PSP’s profits.
Franklin, best known for founding Jarden Corp., which he sold in 2015 to Newell Brands for $15 billion, formed PSP in 2013.
Ackman’s Pershing Square is the leading shareholder, with a 14.5 percent stake.
The pair rolled up several niche chemicals businesses along the way.
At the same time, PSP also rolled up some debt — just as the agrichemical market declined, one Wall street analyst said.
“They got out over their skis putting too much debt on the company, and then there was the downdraft in agriculture,” the analyst said.
Ironically, the rise in the stock price, based largely on the expected sale, could be hurting the chances for the sale, two sources said.
Franklin and Ackman have a history of investing alongside each other, including in Burger King.
Former Merrill Lynch CEO Stanley O’Neal is another big name connected to the company, and is on PSP’s board.
PSP has a second division, specializing in chemicals that help make circuit boards and cars — and that operation is doing better than its agrichemical operations, sources said.
PSP on June 5 announced it was buying a small South African agrichemical business that might have been a signal to suitors it is not a desperate seller, a source said.
PSP and KKR declined comment.