Crop protection provider Adama Agricultural Solutions Ltd. (formerly Makhteshim Agan Industries) is nearing the final stretch. For more than a week already, company management has been on a tour of meetings with institutional investors in the US, and in the coming days, the company is expected to complete the pricing on its shares and to list them for trading on the New York Stock Exchange (NYSE) under the ticker ADAM. Adama appears on the Renaissance Capital website on a list of the companies that are expected to complete their IPOs this week, and the company reported that their road show will end in the next few days.
Adama plans to issue 23.5 million shares at a price currently ranging between $16-$18 per share. In such a situation the company will raise between $376-423 million, and will begin trading with a market cap of $2.6 billion- $2.9 billion after money. The underwriters were granted an option to purchase from the up to 3.525 million additional shares from the company, which would increase the size of the issue by about $60 million, and the company's value accordingly.
High competitive positioning in China
In advance of the IPO, Union Bank of Israel (TASE: UNON) Analyst Doron Dagul published a company overview with a "buy" recommendation, due to the low issue price relative to his target price - $ 20 - which he reached on the basis of a model of discounted future cash flows. Dagul notes that approximately 70% of the world's crop protection market, which totals $59 billion, is controlled by 6 companies: Syngenta, DuPont, Bayer, Dow Chemicals, BASF and Monsanto.
ChemChina holds a controlling stake in the company, which is managed by CEO Chen Lichtenstein.
Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2014
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