IMC Global Sells Investment in Compass Minerals and Its Sulphate of Potash Business Line to Compass Minerals Group for $60.5 Mil
24-Jun-2003
IMC Global Inc. announced today that it is receiving consideration of approximately $60.5 million in two transactions involving privately held minerals/order_t/'>Compass Minerals Group, Inc., of which $57.0 million was received in cash today at closing. The remainder of the purchase price, plus cash consideration for sulphate of potash (SOP) inventory, is scheduled to be paid in the fourth quarter. The transactions are expected to result in a pre-tax gain of approximately $50.0 million.
In the first transaction, Salt Holdings Corporation purchased a majority of IMC Global's minority economic interest in Compass Minerals Group. In the second transaction, IMC Global sold its SOP business line to Great Salt Lakes Minerals Corp., a subsidiary of Compass Minerals Group.
Under terms of the first transaction, IMC Global has exchanged for cash approximately 15 percentage points of its 19.9 percentage points minority economic interest in the common stock of Compass Minerals Group, and has also sold its shares of Compass Minerals preferred stock and related notes. In November 2001, IMC Global sold its Salt and Great Salt Lake (GSL) businesses to Compass Minerals, an entity formed by affiliates of Apollo Management, L.P. of New York, while retaining an economic interest of 19.9 percent in Compass Minerals. Through its GSL operations in Utah, one of Compass Minerals' principal products is a specialty potash known as sulphate of potash, or SOP. As a part of this original transaction, IMC also sold to Compass most of its domestic SOP marketing business and agreed to supply Compass with SOP produced at IMC Global's Carlsbad, New Mexico operations.
In the second transaction, IMC Global has sold the balance of its SOP marketing business, as well as its Carlsbad SOP product line, to Compass Minerals. The primary operations at IMC Global's Carlsbad plant that produce a unique specialty potash product known as K-Mag(R) or Sul-Po-Mag(R) as well as muriate of potash, or MOP, are not affected by the transaction.
"The proceeds from these two transactions will be used to reduce debt and strengthen our balance sheet," said Douglas A. Pertz, Chairman and Chief Executive Officer of IMC Global. "These transactions continue an aggressive, multi-year monetization program of non-core assets and investments designed to simplify our structure, increase the focus on our core crop nutrient businesses, and generate cash to reduce debt and improve our liquidity."
Pertz added that the Company continues to evaluate other modest, non-core asset monetization options. He noted that the Company's efforts to sell the Tampa, Florida Port Sutton marine terminal of its IMC Phosphates Company are continuing, but the transaction is now expected not to be consummated in the second quarter.
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