American Vanguard’s AVD international subsidiary – AMVAC Netherlands B.V. – has purchased the European Nemacur insecticide/nematicide assets of crop protection products maker, Adama Agricultural Solutions Ltd. Financial terms of the deal were not divulged.
Nemacur, a highly effective insecticide/nematicide, is utilized to control soil insects and nematodes on several fruit and vegetable crops. The assets bought by American Vanguard include all trademarks, product registrations, related registration data, and customer information that relates to the marketing and sale of Nemacur in Europe.
Earlier, in 2010, American Vanguard acquired Nemacur assets outside of Europe from Bayer Crop Science. The acquisition of the European assets, thus, completes the company’s global ownership of this crop protection product.
The acquisition strengthens American Vanguard’s existing insecticide portfolio. It will also significantly enhance the company’s overseas expansion initiative. Moreover, the buyout reinforces the competitive position of AMVAC Netherlands for high value fruit and vegetable crops in Europe.
American Vanguard posted lower-than-expected fourth-quarter 2014 results in Feb 2015 with both revenues and earnings missing Zacks Consensus Estimates. Its results for full-year 2014 also trailed expectations.
American Vanguard’s results in 2014 were hit by lower procurement of its corn products by the Midwest distribution channel, significant unplanted acres and large amounts of unapplied crop protection inputs. Moreover, large unused inventories at distributors, retailers and farmers led to a considerable fall in restocking orders during the year.
American Vanguard expects prospects for planting inputs to remain uncertain in 2015 as lower corn commodity pricing coupled with reduced grower profitability may lead to cautious buying in the Midwest.
American Vanguard currently holds a Zacks Rank #5 (Strong Sell).
Better-ranked companies in the specialty chemical space include KMG Chemicals Inc. KMG, Minerals Technologies Inc. MTX and OM Group Inc. OMG with all retaining a Zacks Rank #1 (Strong Buy).
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