From Gemini AI
If looks like they got a good deal. All transacted in $US too.
Based on the publicly available information, Adecoagro and ACA's acquisition of Nutrien's 50% stake in Profertil for $600 million implies the following valuation multiples:
- Total Enterprise Value (EV): The $600 million price for a 50% stake implies a total enterprise value for Profertil of $1.2 billion.
- EV/EBITDA Multiple: Profertil generated an average annual EBITDA of approximately $390 million over the 2020-2024 period. Using this figure, the implied EV/EBITDA multiple for the entire company is: $1.2 billion / $390 million = 3.1x
Some reports have noted that this valuation appears to be highly favorable, especially when compared to typical industry benchmarks for fertilizer producers, which often trade at 5-7x EBITDA
--------------------------------------------------------------------------------
The 3.1x EV/EBITDA multiple for Profertil is notably low compared to typical industry benchmarks for publicly traded North American fertilizer producers like CVR Partners (UAN) and CF Industries (CF), which generally trade at a higher multiple. This discrepancy can be attributed to several factors specific to the Profertil deal.
Comparison to CVR Partners (UAN) and CF Industries (CF)
- CVR Partners (UAN): As a publicly traded U.S. company, UAN's valuation is based on market perception, investor sentiment, and its specific operational profile. Its EV/EBITDA multiple is around 6.8x, which is more than double Profertil's. This higher multiple reflects the relative stability and lower perceived risk of operating in the United States, a mature and politically stable market.
- CF Industries (CF): A global leader in the fertilizer industry, CF Industries' valuation is also based on its public market performance. The company's EV/EBITDA multiple is around 5.5x, also significantly higher than Profertil's. CF's valuation benefits from its diversified global operations, economies of scale, and market position, which are highly valued by investors.
- Profertil: The 3.1x multiple for Profertil is a private market valuation from a strategic acquisition, not a public market trading multiple. These multiples are often lower than public ones for several reasons. Furthermore, Profertil's operations are located in Argentina, a country with significant macroeconomic volatility and political risk, including a history of currency controls, high inflation, and interventionist government policies. This risk premium heavily discounts the value of assets located there.
|
