Compass Minerals Agrees To Sell South America Specialty Plant Nutrition Business For $418 Million


Essential minerals provider Compass Minerals has agreed to sell its South America specialty plant nutrition business to ICL Brasil for $418 million. ICL Brasil is a subsidiary of ICL Group.

Compass Minerals’ (CMP) President and CEO, Kevin S. Crutchfield said, “Over the past year, our board and senior management team have been conducting a detailed analysis of our company’s current asset portfolio, product mix and core competencies with the aim of maximizing sustainable value creation for our shareholders, customers and communities.”

Crutchfield further added, “Today’s announced transaction represents a significant step toward that goal, as it will strengthen our balance sheet and enhance our ability to pursue strategic opportunities for growth as a leading essential minerals company.”

Compass Minerals plans to primarily pare down debt with the proceeds. As a result, it sees its net debt to adjusted EBITDA ratio at 3.4x by the end of 2021 compared to 4.3x at the end of 2020.

The transaction is expected to close in 3Q. Compass Minerals had announced plans to sell its plant nutrition and chemicals business units in Brazil. The sale process for the chemicals unit is ongoing, according to the company. (See Compass Minerals stock analysis on TipRanks)

Recently, Stifel Nicolaus analyst Vincent Anderson reiterated a Buy rating on the stock and increased the price target to $78 (25.2% upside potential) from $74.

Compass Minerals scores a 6 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is expected to perform in line with the broader market. Shares have rallied about 65.1% over the past year.

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