United Phosphorus acquires CROPSERVE, South Africa

United Phosphorus Ltd has announced that on August 09, 2006 the Company has increased its shareholding to 100% in Crop Serve (Pty) Ltd., South Africa, a holding Company of five subsidiaries all located in Africa, through its Mauritius subsidiary. The sale includes all assets including stocks of the Company, products, registrations and all other property rights associated with the business of CROPSERVE. Till now the Company was holding 19% ordinary shares in the Company.

CROPSERVE has five different subsidiaries, out of which three are located in Zambia and one each in Mozambique and Malawi. The total revenue is about US$ 10 million and the total cost of acquisition for the Company is US$ 3 million. The acquisition is effective from August 09, 2006 and is an all cash offer. The Company will fund this through its cash accrual.

As a part of this acquisition, the Company has acquired about 4% stake in Villa Crop Protection (Pty) Ltd (VILLA). Additionally, the Company will be buying 7% in this Company to increase the stake to 11%. VILLA is the largest distributor of crop protection chemicals in South Africa with a turnover of US$ 40 million.

This acquisition provides the Company with a strong platform to expand and strengthen its presence in South Africa. After considerable growth both organically and acquisitions in USA, Europe, and in South Africa, the Company has been actively pursuing opportunities for growth in the other regions, the Company has been associated with CROPSERVE for the last 3 years as a shareholder. With this acquisition, it has increased its share to 100%.

Apart from having presence in the other African countries, the Company will further strengthen its relationship with VILLA through additional share purchases and will have a good presence in South Africa as well.

Source : Equity Bulls

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