Omnia CEO Seelan Gobalsamy
JSE-listed chemicals group Omnia Holdings has reached an agreement to sell its Oro Agri business to Rovensa – a Europe-based business that procures and distributes biocontrol, bionutrition and crop protection solutions.
Omnia in June received a nonbinding offer for the business, which warranted further investigation.
Omnia CEO Seelan Gobalsamy says the board undertook a comprehensive review of Oro Agri as part of the group’s broader strategy and has concluded to accept Rovensa’s attractive offer, while recommending that shareholders approve the transaction during a general meeting scheduled for December 14.
Rovensa’s offer is based on an enterprise value of $165-million for Oro Agri, which will translate to aggregate cash proceeds of about $152-million for Omnia.
Omnia acquired Oro Agri in 2018 for $100-million.
Gobalsamy states that Rovensa has more synergies with Oro Agri, as well as capacity to fund the agribusiness’ growth plan.
Omnia plans to use the proceeds from the disposal to pay down debt and position the group with a strong financial base from which to fund selective organic expansionary capital expenditure and working capital.
The company is reviewing its dividend policy, as well as considering a special dividend or share buyback programme, which will be announced with its results for the year ending March 2021.
Omnia retains a far-reaching international footprint with attractive opportunities for its Agriculture International and Mining International businesses, despite the disposal.
Omnia’s Agriculture International business, which represents about 20% of the company’s international income, is actively growing its biostimulant, speciality nutrient and organic fertiliser coating product ranges, demand for which, together with demand for humates from Omnia’s unique Australian source, remains high.