November 30, 2022
Biologicals are getting a lot more attention these days, especially for traditional crop protection companies seeking new ways to tackle pests eating away at farmer profits. Corteva is expanding into biologicals with its announced agreement to acquire Stoller Group.
Houston-based Stoller is considered one of the largest independent biological companies in the ag market with operations and sales in more than 60 countries. Stoller has forecasted revenues in 2022 above $400 million. The transaction brings immediate scale and profitability with margins that will be accretive to Corteva.
In the announcement, Corteva reported that the acquisition “reinforces Corteva’s commitment to providing farmers with biological tools that complement evolving farming practices and help them meet changing market expectations.”
Chuck Magro, CEO, Corteva adds: “Biologicals provide farmers with sustainably-advantaged tools that complement crop protection technologies, and collectively, can work to address global challenges around food security and climate change.”
Magro says the combination provides a platform for expanding and accelerating Corteva’s Biologicals business.
Biological market growth
The market is expected to grow high-single digits annually through 2035 representing approximately 25% of the overall crop protection market by 2035, Corteva notes. In three years, Corteva has develop its Biologicals business by implementing strategies build around external and internal innovation, research and development collaborations, licensing and distribution agreements and acquisitions.
Guellermo de la Borda, CEO, Stoller, says that in the company’s 50-plus year history “we have successfully helped growers around the world increase their productivity and improve their sustainability.”
Stoller is the second biologicals acquisition for Corteva this year. Early this year the company signed an agreement to cooperate with Symborg to distribute Utrisha-N in the market. In September, Corteva announced an agreement to acquire Symborg, based in Spain.
The Stoller purchase price of $1.2 billion in cash represents an enterprice value multiple of about 12-fold based on Stollers expected earnings before interest, taxes, depreciation and amortization (EBITDA) for 2022 on a standalone basis. The purchase price will be paid at closing, which is anticipated to be completed in the first half of 2023 following regulatory approvals and satisfaction of customary closing conditions. The company expects Stoller results will be accretive to both operating EBITDA and Operating earnings per share for 2023.
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