StockMarketWire.com - Origin Enterprises has reached agreement to acquire CM Fertilisers for £19m.

The acquisition furthers the development of the Group's core position in the provision of sustainable agricultural technologies and integrated on-farm advisory services that support the primary sectors of the food industry.

CM Fertilisers, part of Carrs Milling Industries and based in Scotland and the North of England, is a leading provider of branded specialist fertilisers together with integrated nutrient management systems servicing the arable, grassland, horticulture and forestry sectors.

The company, which services a complementary geographic footprint, markets an extensive range of technically based nutrition applications that strongly support Origin's existing position in the United Kingdom.

Under the terms of the transaction Origin will acquire 100% of CM Fertilisers for an equity consideration of £19m. plus the working capital related debt at completion which is estimated at £5.9m.

The consideration is based on maintainable earnings before interest and tax (EBIT) of £3.0m. from the business. Turnover for the year ended 28 August 2010 was £59.3m. and EBIT amounted to £1.9m.

The transaction is subject to a number of conditions including approval by the shareholders of Carrs Milling.

The acquisition will be funded from existing bank facilities and is expected to be earnings enhancing from the date of completion, which is expected to follow shortly after the Carrs Milling General Meeting on 13 July 2011.

Commenting on the announcement Tom O'Mahony, CEO of Origin said: "We are delighted with the acquisition of CM Fertilisers, a highly focused business dedicated to optimising primary producers' crop yield and quality in an environmentally compliant manner.

"This acquisition builds upon Origin's commitment to create customised value propositions that meet farmers' needs through new service applications providing for the maintenance of soil fertility and the sustainable improvement to plant nutrition along with an enhanced procurement capability facilitating strategic opportunity to reduce the impact of input price volatility."




At 8:17am: [LON:OGN] share price was +0.02p at 3.92p



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