August 24, 2017 / 7:09 PM / in a year

Exclusive: Platform Specialty abandons agrochemicals unit sale - sources

(Reuters) - Platform Specialty Products Corp (PAH.N) has decided to abandon the sale of its agrochemicals business after the offers it attracted failed to meet its valuation expectations of more than $4.5 billion, people familiar with the matter said on Thursday.

Shares of Platform Specialty dropped as much as 8 percent on the news, as investors were hoping that a quick sale of the business would have helped pay down much of the company’s $5.3 billion long-term debt pile.

Platform Specialty may now pursue an initial public offering or spinoff of the agrochemicals business, said the sources, who asked not to be identified because the deliberations are confidential.

Platform Specialty did not immediately respond to a request for comment. Its shares were trading down 4.4 percent at $11.54 in late afternoon trading in New York, giving the company a market capitalization of $3.31 billion.

The abandoned sale represents a blow to Platform Specialty co-founder and chairman Martin Franklin, a prolific dealmaker who spent $4.9 billion on acquisitions to put together the company’s agrochemicals unit.

It is also a disappointment for William Ackman, whose hedge fund Pershing Square Capital Management LP owns 14.5 percent of Platform Specialty.

At least two consortia were vying for Platform Specialty’s agrochemicals business earlier this month: a private equity group led by Blackstone Group LP (BX.N) and CVC Capital Partners Ltd, and a pairing of Indian agrochemicals producer UPL Ltd (UPLL.NS) and buyout firm New Mountain Capital LLC.

Franklin launched Platform Specialty in 2013 as a vehicle to buy other companies. Last year, he sold consumer products company Jarden Corp, which he also built through acquisitions over a period of 15 years, to larger U.S. peer Newell Brands Inc (NWL.N) for $16 billion.

Platform Specialty operates two main units, each accounting for half of its sales: performance solutions and agricultural solutions. The performance solutions business makes surface and coating materials used in electronics, automotive production, commercial packaging and printing.

The agricultural solutions business offers agrochemicals to protect against weeds, insects and diseases. It was built through the $3.5 billion acquisition of Arysta in 2015, the $1 billion takeover of CAS in 2014 and the $370 million purchase of Agriphar, also in 2014.

Activist hedge fund Elliott Management Corp disclosed a 3.8 percent stake in Platform Specialty as of the end of March.

Reporting by Lauren Hirsch and Greg Roumeliotis in New York; Editing by Matthew Lewis and Cynthia Osterman

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