Compass Minerals (NYSE: CMP) has acquired the leading producer of sulfate of potash in Canada,Big Quill Resources Inc. It was an all-cash transaction, no shares, valued at 56 million Canadian dollars, subject to to the usual adjustments post-closing.
Big Quill Resources produces high-purity sulfate of potash, to be used in non-agricultural specialty applications as well as agricultural nutrients for high-value crops and turf.
Big Quill Resources is located at Big Quill Lake near Wynyard, Saskatchewan, Canada.
We expect this acquisition to be immediately accretive.
Big Quill was an attractive acquisition for compass and minerals because of its unique production capability, it’s in-house technical expertise, and the innovative, entrepreneurial way it approaches business. Compass minerals expects the acquisition to immediately broaden and strengthen it’s own business in the specialty fertilizer market.
Angelo Brisimitzakis, Compass Minerals president and CEO, said “We expect this acquisition to be immediately accretive. In addition, we plan to expand Big Quills production and sales of high-value, specialty products over time.”
Big Quill’s Wynyard site, comes with an annual production capacity of around 40,000 short tons of sulfate of potash. Most of the?sulfate of potash is extracted from naturally occurring sulfate in the brine at Big Quill Lake. It is then combined with potassium chloride purchased through a very long-term, advantaged supply agreement. In 2010, Big Quill revenue is expected to be almost CA$23 million. EBITDA is estimated at close to CA$7 million.
We plan to expand Big Quill’s production and sales of high-value, specialty products over time.
Brisimitzakis says Compass Minerals funded the purchase with current cash on hand.
Compass Minerals is based in Kansas City producing minerals, including salt, sulfate of potash specialty fertilizer and magnesium chloride. The company provides highway de-icing salt to customers in North America and the United Kingdom and specialty fertilizer to growers around the world. The company also has consumer deicing and water conditioning products, ingredients used in consumer and commercial foods, and other mineral-based products for consumer, agricultural and industrial applications.
Surprisingly, Compass Minerals also provides records management services to businesses throughout the U.K.
Compass Minerals’ Chief Financial Officer is Rodney L. Underdown.