ICL Accelerating Biologicals Portfolio Growth in Brazil with Strategic Acquisition

Rhea-AI Summary

ICL acquires Nitro 1000, expanding its biologicals market presence in Brazil and enhancing product portfolio. The $30 million acquisition aims to leverage Nitro 1000's expertise in biologicals manufacturing to offer sustainable solutions for soybean, corn, and sugar cane crops, reducing the use of fertilizers. The move aligns with ICL's strategy to invest in agriculture, particularly in Brazil, and capitalize on the growing demand for biologicals solutions. The acquisition is expected to drive innovation, increase market share, and strengthen ICL's position in the specialty plant nutrition market.

Insights

Market Research Analyst

The acquisition of Nitro 1000 by ICL represents a strategic move to diversify and strengthen its position in the agricultural sector, particularly in the biologicals market. The transaction, valued at approximately $30 million, is not just a financial investment but a calculated step towards capturing a larger share of a rapidly growing market. The biologicals space is gaining traction due to the increasing need for sustainable agricultural practices and the global push towards reducing chemical fertilizer usage.

ICL's expansion into biologicals is timely, given the projected compound annual growth rate (CAGR) of 13.8% in the ag biologicals market. By incorporating Nitro 1000's product line, which focuses on major crops such as soybean, corn and sugar cane, ICL is positioning itself to meet the rising demand for eco-friendly crop solutions. This could potentially lead to increased revenue streams and market share, especially in Brazil where ICL already enjoys a significant presence.

Financial Analyst

From a financial perspective, the acquisition of Nitro 1000 by ICL is relatively modest in scale but strategically significant. The $30 million price tag suggests a targeted investment designed to enhance ICL's product portfolio without overextending its capital resources. Investors should note that ICL's Brazilian sector accounted for 20% of its sales in 2023, indicating that the company is deepening its foothold in a key market.

ICL's previous successful acquisitions in Brazil, such as the South American Plant Nutrition business of Compass Minerals and Fertiláqua, both in 2021, demonstrate a pattern of strategic growth in the region. This latest acquisition is expected to yield synergies with these earlier investments, potentially leading to improved operational efficiencies and cost savings. The integration of Nitro 1000 could offer ICL a competitive edge in the specialty plant nutrition space, which may reflect positively on its financial performance and attractiveness to investors.

Sustainability Expert

ICL's acquisition of Nitro 1000 underscores the company's commitment to sustainability in agriculture. Biologicals are a cornerstone of sustainable farming practices, as they can enhance nutrient uptake and stress tolerance in crops, reducing the dependence on traditional fertilizers. This aligns with global sustainability goals and the increasing regulatory pressures to move away from chemical-based agricultural inputs.

The integration of Nitro 1000's biological solutions into ICL's portfolio not only enhances the company's sustainability profile but also meets a growing consumer demand for environmentally responsible products. As the agricultural industry continues to evolve, ICL's focus on sustainable solutions may improve its brand image and customer loyalty, contributing to long-term business resilience.

Company adding meaningful manufacturing capabilities and expanding product portfolio with acquisition of Nitro 1000

TEL AVIV, Israel--(BUSINESS WIRE)-- ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, today announced it has acquired Nitro 1000, a manufacturer, developer and provider of biologicals in Brazil for approximately $30 million. This acquisition marks another meaningful step into the biologicals market, while expanding ICL’s product offerings and positioning the company for further expansions into new and adjacent end-markets.

Nitro 1000 will immediately join the ICL product portfolio, and the company will begin selling to its existing customer base in Brazil. Nitro 1000’s products are mainly aimed at soybean, corn and sugar cane crops, and their application replaces or optimizes the use of fertilizers. This not only helps farmers increase profitability, it also offers a more sustainable solution.

“We’re excited to merge Nitro 1000’s core expertise in biologicals manufacturing with ICL’s extensive R&D capabilities and innovation engine and to further execute against our stated strategy of continuing to invest in agriculture – specifically in Brazil,” said Elad Aharonson, president of ICL Growing Solutions. “This acquisition allows us to leverage our global Growing Solutions business to develop new products and technology, while benefitting from our existing production capacity and go-to-market strategy. It will also enable us to continue to increase market share and leadership in Brazil specialty plant nutrition.”

Increasing interest in alternatives to agrochemicals has created higher demand for biologicals solutions, and the ag biologicals market is expected to grow at a 13.8% CAGR and reach $27.9 billion by 2028, according to MarketsandMarkets. Biologicals stimulate natural processes to enhance or benefit nutrient uptake, nutrient use efficiency, abiotic stress tolerance, and crop quality and yield.

In Brazil, ICL currently has more than 1,700 employees, and the country represented approximately 20% of sales in 2023. The agricultural business portfolio in Brazil includes enhanced efficiency and gradual release fertilizers, micronutrients, secondary macronutrients, foliar fertilizers, physiological action products, seed treatments, soil conditioners, adjuvants, and products for animal nutrition and industrial applications. The company expects the integration of Nitro 1000 to benefit significantly from its two recent successful acquisitions in Brazil, including the South American Plant Nutrition business of Compass Minerals and Fertiláqua, both in 2021.

“We founded Nitro 1000 in 2007 and made the necessary investments to develop our products and reach this point on our journey,” said Iris Guindani, one of the founders of Nitro 1000, who will remain as head of operations. “This next phase will allow us to leverage ICL's resources, including its robust R&D capabilities, to develop additional new products and target adjacent end-markets.”

About ICL

ICL Group is a leading global specialty minerals company, which creates impactful solutions for humanity's sustainability challenges in the food, agriculture and industrial markets. ICL leverages its unique bromine, potash and phosphate resources, its global professional workforce, and its sustainability focused R&D and technological innovation capabilities, to drive the company's growth across its end markets. ICL shares are dual listed on the New York Stock Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL). The company employs more than 12,500 people worldwide, and its 2023 revenues totaled approximately $7.5 billion.

For more information, visit ICL's website at icl-group.com.
To access ICL's interactive CSR report, visit icl-group-sustainability.com.
You can also learn more about ICL on Facebook, LinkedIn, YouTube, Twitter and Instagram.

Forward Looking Statements

This announcement contains statements that constitute forward‑looking statements, many of which can be identified by the use of forward‑looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.

Forward-looking statements appear in this press release and include, but are not limited to, statements regarding the company’s intent, belief or current expectations. Forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to: estimates, forecasts and statements as to management's expectations with respect to, among other things, business and financial prospects, financial multiples and accretion estimates, future trends, plans, strategies, positioning, objectives and expectations, general economic, market and business conditions, supply chain and logistics disruptions, energy storage and electric vehicle growth, the potential for new COVID-19 variants, global unrest and conflict, governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, changes in environmental, tax and other laws or regulations and the interpretation thereof, and war or acts of terror and/or political, economic and military instability in Israel and its region, including the current state of war declared in Israel and any resulting disruptions to our supply and production chains. As a result of the foregoing, readers should not place undue reliance on the forward‐looking statements contained in this press release concerning the timing of the transaction, or other more specific risks and uncertainties facing ICL, such as those set forth in the “Risk Factors” section of its Annual Report on Form 20-F filed on February 23, 2022, as such risk factors may be updated from time to time in its Current Reports on Form 6-K and other filings ICL makes with the U.S. Securities and Exchange Commission from time to time.

Forward-looking statements refer only to the date they are made, and the company does not undertake any obligation to update them in light of new information or future developments or to publicly release any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240227911936/en/

Investor and Press Contact – Global

Peggy Reilly Tharp

VP, Global Investor Relations

+1-314-983-7665

Peggy.ReillyTharp@icl-group.com

Investor and Press Contact - Israel

Adi Bajayo

ICL Spokesperson

+972-3-6844459

Adi.Bajayo@icl-group.com

Source: ICL Group LTD

FAQ

What did ICL acquire?

ICL acquired Nitro 1000, a manufacturer, developer, and provider of biologicals in Brazil.

How much did the acquisition cost?

The acquisition of Nitro 1000 by ICL cost approximately $30 million.

What products does Nitro 1000 offer?

Nitro 1000's products are mainly aimed at soybean, corn, and sugar cane crops, offering sustainable solutions that replace or optimize the use of fertilizers.

What is the expected growth rate of the ag biologicals market by 2028?

The ag biologicals market is expected to grow at a 13.8% CAGR and reach $27.9 billion by 2028.

How does the acquisition benefit ICL?

The acquisition of Nitro 1000 allows ICL to expand its product portfolio, leverage its R&D capabilities, and strengthen its position in the specialty plant nutrition market in Brazil.