DEERFIELD, Ill.--(BUSINESS WIRE)--
CF Industries Holdings, Inc. (NYSE:CF) announced today that it has
agreed with Yara International ASA (Yara) to acquire its 50 percent
equity interest in GrowHow UK Limited (GrowHow) for total cash
consideration of $580 million, making GrowHow a wholly owned subsidiary.
At closing, the GrowHow business will be consolidated into CF Industries
with a cash free, debt free balance sheet. GrowHow owns and operates
nitrogen production facilities in Ince and Billingham, U.K.
“We are pleased to announce this agreement to acquire Yara’s interest in
GrowHow,” commented Tony Will, president and chief executive officer, CF
Industries Holdings, Inc. “The operations have an advantaged position in
an import-dependent region. We know GrowHow well and expect a mid-teens
return profile for the acquisition. The purchase of the remaining
interest in GrowHow is a continuation of CF Industries’ track record of
pursuing shareholder value-creating capital deployment.”
The Ince facility is located in northwestern England and consists of an
ammonia plant, three nitric acid plants, an ammonium nitrate (AN) plant
and three NPK fertilizer compound plants. The Billingham facility is
located in the Teesside chemical area in northeastern England, and
consists of an ammonia plant, three nitric acid plants, a carbon dioxide
plant and an AN fertilizer plant. Combined, the two facilities have the
capacity to produce approximately 0.9 million short tons of gross
ammonia, 1.2 million short tons of AN and 0.4 million short tons of NPK
compounds.
As of May 31, 2015, prior to purchase accounting and on a U.S. GAAP
basis, GrowHow had total inventories of £66 million, receivables of £41
million, and fixed assets of £195 million. The company also had current
liabilities of £43 million, long-term payables of £14 million, and a net
pension deficit of £90 million.
The U.K. is dependent on imports of nitrogen to meet its consumption
demands. Nitrogen imports primarily consist of AN and urea with ammonia
accounting for a negligible portion of imports. Currently, imports of AN
to the U.K. make up approximately 45% (700,000 short tons) of supply.
Additionally, U.K. natural gas costs have fallen meaningfully along with
oil prices. In terms of delivered cost of AN to the U.K., GrowHow is
positioned at the low end of the U.K. supply curve.
CF Industries has extensive knowledge of and familiarity with the
GrowHow business as a result of its involvement with the GrowHow joint
venture over the last five years. Earnings from CF Industries’ 50
percent interest in GrowHow are currently included in CF Industries’
financial statements under Equity in Earnings of Non-Operating
Affiliates – Net of Taxes. Following the closing of the acquisition
of the outstanding interests, the results will be included in CF
Industries’ consolidated results. The final purchase price is subject to
closing adjustments. The completion of the transaction is subject to
customary closing conditions and is expected to occur later this year.
CF Industries will be posting a presentation with the transaction
highlights to the investor portion of the company’s website at www.cfindustries.com
and hosting a conference call at 4:00pm ET on Wednesday, July 1, 2015 to
provide an overview of the transaction and answer analysts’ questions.
Investors can access the call by dialing 866-748-8653 or 678-825-8234.
The passcode is 78032368. The conference call also will be available
live on the company’s website. Participants also may pre-register for
the webcast on the company’s website. Please log-in or dial-in at least
10 minutes prior to the start time to ensure a connection. A replay of
the call will be available for seven days by calling (855) 859-2056 and
citing code 78032368.
About CF Industries Holdings, Inc.
CF Industries Holdings, Inc., headquartered in Deerfield, Illinois,
through its subsidiaries is a global leader in the manufacturing and
distribution of nitrogen products, serving both agricultural and
industrial customers. CF Industries operates world-class nitrogen
manufacturing complexes in the central United States and Canada, and
distributes plant nutrients through a system of terminals, warehouses,
and associated transportation equipment located primarily in the
midwestern United States. The company also owns 50 percent interests in
GrowHow UK Limited, a plant nutrient manufacturer in the United Kingdom
and an ammonia facility in The Republic of Trinidad and Tobago. CF
Industries routinely posts investor announcements and additional
information on the company’s website at www.cfindustries.com
and encourages those interested in the company to check there frequently.
Safe Harbor Statement
All statements in this communication, other than those relating to
historical facts, are forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
our control, which could cause actual results to differ materially from
such statements. These statements include, but are not limited to,
statements about the benefits, expected timing of closing and other
aspects of the GrowHow transaction as contemplated; statements about
future strategic plans; and statements about future financial operating
results. Important factors that could cause actual results to differ
materially from our expectations include, among others: risks and
uncertainties arising from the possibility that the GrowHow transaction
as contemplated may be delayed or may not occur; an inability to
achieve, or a delay in achieving, the expected benefits of the GrowHow
transaction as contemplated; difficulties associated with the
integration of GrowHow; unanticipated costs or liabilities associated
with the GrowHow transaction; the risk that disruptions from the GrowHow
transaction as contemplated will harm relationships with customers,
employees and suppliers; the volatility of natural gas prices in North
America and the United Kingdom; the cyclical nature of our business and
the agricultural sector; the global commodity nature of our fertilizer
products, the impact of global supply and demand on our selling prices,
and the intense global competition from other fertilizer producers;
conditions in the U.S. and U.K. agricultural industry; difficulties in
securing the supply and delivery of raw materials, increases in their
costs or delays or interruptions in their delivery; reliance on third
party providers of transportation services and equipment; the
significant risks and hazards involved in producing and handling our
products against which we may not be fully insured; risks associated
with cyber security; weather conditions; our ability to complete our
production capacity expansion projects on schedule as planned and on
budget or at all; risks associated with other expansions of our
business, including unanticipated adverse consequences and the
significant resources that could be required; potential liabilities and
expenditures related to environmental and health and safety laws and
regulations; our potential inability to obtain or maintain required
permits and governmental approvals or to meet financial assurance
requirements from governmental authorities; future regulatory
restrictions and requirements related to greenhouse gas emissions; the
seasonality of the fertilizer business; the impact of changing market
conditions on our forward sales programs; risks involving derivatives
and the effectiveness of our risk measurement and hedging activities;
our reliance on a limited number of key facilities; risks associated
with joint ventures; acts of terrorism and regulations to combat
terrorism; risks associated with international operations; losses on our
investments in securities; deterioration of global market and economic
conditions; and our ability to manage our indebtedness. More detailed
information about factors that may affect our performance may be found
in our filings with the Securities and Exchange Commission, including
our most recent periodic reports filed on Form 10-K and Form 10-Q, which
are available in the Investor Relations section of the CF Industries
website. Forward-looking statements are given only as of the date of
this release and we disclaim any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150630006656/en/
CF Industries Holdings, Inc.
Dan Swenson
Treasurer
847-405-2515
dswenson@cfindustries.com
or
Chris
Close
Director, Corporate Communications
847-405-2542
cclose@cfindustries.com
Source: CF Industries Holdings, Inc.