Croda adjusts intentions with Plant Impact post-acquisition

Croda International subsidiary Croda Europe announced on Friday that, further to the completion of its recommended cash offer for the entire issued and to-be-issued ordinary share capital of Plant Impact, its board of directors had taken “certain necessary courses of action” which differed from the company’s statements of intent made at the time of the acquisition.

The FTSE 100 company completed the acquisition by way of a scheme of arrangement on 28 March.

As it had set out in the offer documentation, it was the Croda Europe board's intention, following completion of the offer, to undertake an exercise to evaluate the market positioning and strategy of Plant Impact and how best to integrate Plant Impact, its activities and employees into the wider Croda group.

Croda said that evaluation exercise was now complete, and its findings had necessitated “certain changes” to the original stated intentions, in order to best utilise Plant Impact's technology, skills and wider employee base and position the business effectively to address its end markets in a sustainable way.

“These internal changes will have no impact on existing business, customer service levels or Croda's fundamental rationale for the acquisition,” Croda said in its statement on Friday.

“Overall the integration programme has been positive, with the majority of Plant Impact's employees being successfully integrated into the wider Croda group, which employs more than 4,300 people globally.”

Croda said it had identified a “specific need” to change Plant Impact's commercial strategy and the route to market in Brazil.

As a result, it was intended that there would be a reconfiguration of the sales force together with an associated redundancy programme in relation to Plant Impact's agricultural sales team in Brazil.

“Following this programme, Plant Impact's business in Brazil will operate from local offices of the Croda group and the lease on the Plant Impact office in Brazil will not be required and therefore will not be renewed,” the board said.

“The net impact of Croda's integration plans on Plant Impact Brazil is likely to be a reduction of nine roles.”

As part of its broader global activities, Croda said it remained “positive” about the prospects for Plant Impact's business, and was continuing to invest resources, time and capital in several areas such as research and development activity aimed at sustainable long-term growth.