Origin Enterprises buys assets of UK company for €21m
Irish agri group Origin Enterprises has acquired assets from UK-based Bunn Fertiliser in a deal expected to cost around £18.2m (€21m).
Bunn is a provider of prescription fertiliser and nutrition-management systems to the farming sector.
The company recorded turnover of £127m last year, but its earnings before interest and tax were just £2.8m.
Origin said it had acquired the fertiliser activities and "certain assets" of Bunn in a move it said would enhance efficiencies.
Origin will pay an initial £14.2m to Bunn, but the final value of the transaction is expected to rise to £18.2m.
Completion of the transaction is subject to a number of conditions, including obtaining clearance from the Competition and Markets Authority in the UK.
The purchase is being funded by existing loan facilities that Origin has. Origin said it expected the purchase would yield a return within the first full year of ownership.
"Bunn advances the group's capacity to manage supply chain complexity as well as providing complementary customer and product channel access," said Origin chief executive Tom O'Mahony.
"Bunn is an excellent business with a dedicated commitment to addressing the crop yield, quality and soil fertility requirements of primary producers," Mr O'Mahony added.
Origin will issue half-year results for the year ended January 31 on Thursday.
The company said it had seen "an encouraging start" to its financial year, which it said was due to improved weather conditions. Shares in Origin were trading down slightly yesterday at €6.50 per share following the announcement of the Bunn deal.