Nufarm Limited

Acquisition of European product portfolio and setting a long-term collaboration with Sumitomo: Nufarm Limited (ASX: NUF), a chemical supplier in Australia, is acquiring a portfolio of crop protection products (Century Portfolio) from Adama Agricultural Solutions Ltd and Syngenta Crop Protection AG and related group companies for US$490 million. The Century Portfolio includes established brands with over 50 crop protection formulations and more than 260 registrations in European markets. The Portfolio is expected to contribute net sales of approximately A$250m and EBITDA of approximately A$95-100 million in the FY 19, which will be the first full year of NUF ownership. The acquisition is expected to improve group margins and cashflow conversion profile and is expected to be mid to high single digit earnings per share accretive (pre-amortisation) in the first full year of ownership (FY19). Moreover, the funding for the acquisition will be through a combination of a fully underwritten, pro-rata accelerated renounceable entitlement offer with retail rights trading of approximately A$446 million and A$272 million from existing debt facilities. On the other hand, NUF has signed a long-term extension to a series of global collaboration agreements with Sumitomo Chemical Company. The collaboration agreements signed will allow both the companies to formalise arrangements relative to the development and distribution of a number of high value solutions focused strongly on Sumitomo’s fungicide pipeline. The commercialisation of the respective products would begin after their registration and due regulatory approval from relevant authorities. The registration submissions for the products in Brazil are planned from late 2017 onwards. Meanwhile, NUF stock has fallen about 12% in last six months as on October 23, 2017, and were reported to be on a trading halt on October 24, 2017.

Fletcher Building Limited (Australia)

Trading halt ahead of release of earnings guidance: Fletcher Building Limited (Australia) (ASX: FBU) had lately confirmed that it engaged KPMG to conduct a review of the two largest projects in its B+I business and two largest projects in its Infrastructure business, to augment existing governance processes. The company is reviewing the financial performance of its two largest B+I projects, and the impact of that financial performance on earnings guidance for FY18. Meanwhile, FBU stock has risen 2.41% in last three months as on October 23, 2017. FBU stock has been placed in Trading Halt at the request of the company. The trading halt is expected to cease with the announcement of earnings guidance for FY18. There may be some significant write downs with announcement on a new chief executive. FBU had reported an 80% fall in earnings after tax to $NZ105 million for FY17 at the back of weakness in Building and Interiors business unit.

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