Corteva to buy Stoller Group for $1.2bn

February 2023 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

February 2023 Issue

In its second biologicals transaction over the past 12 months, US agricultural chemical and seed company Corteva, Inc. is to acquire independent biologicals firm Stoller Group, Inc. in a deal valued at $1.2bn.

The Stoller purchase price represents an enterprise value multiple of approximately 12 times based on Stoller’s expected earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2022 on a standalone basis.

Moreover, 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.

One of the largest independent biologicals companies in the industry, Stoller helps growers around the world succeed with science-proven offerings that include physiological-signalling compounds, such as plant hormones, high-technology nutrients, and microorganisms that can be used alone or in combination to improve plant efficiency and promote plant resilience to stress.

“In Stoller’s 50-plus year history, we have successfully helped growers around the world increase their productivity and improve their sustainability,” said Guillermo de la Borda, chief executive of Stoller. “We are proud to join forces with Corteva as we share a vision of helping farmers succeed in growing the nutritious food the world relies on.”

With operations and sales in more than 60 countries and 2022 forecasted revenues of more than $400m, the Houston-based Stoller brings immediate scale and profitability, with EBITDA margins that will be accretive to Corteva.

By combining with Corteva, Stoller provides a platform for expanding and accelerating Corteva’s biologicals business to become one of the largest players in the rapidly expanding biologicals market – a market that is expected to grow in the high-single digits annually through 2035, representing approximately 25 percent of the overall crop protection market by 2035.

“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,” said Chuck Magro, chief executive of Corteva. “Stoller represents a leader in the biologicals industry given its commercial presence and market expansion potential, while also delivering attractive growth and operating margins.”

Over the past three years, Corteva has developed a world-class biologicals business by implementing smart, nimble strategies built around external and internal innovation, R&D collaborations, licensing and distribution agreements, and acquisitions.

Bringing together the complementary commercial and technical strengths of Stoller and Symborg – an expert in microbiological technologies acquired by Corteva in September 2022 – is part of Corteva’s overall biologicals strategy.

Serving as lead financial adviser to Stoller Group is J.P. Morgan Securities LLC, with Piper Sandler serving as financial adviser. Latham & Watkins is serving as legal adviser. Serving as financial adviser to Corteva is Evercore.

“This transaction is a true 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,” concluded Mr de la Borda. “Our innovative solutions and deep expertise will continue to make an impact for years to come.”

Fraser Tennant