Vastopolis Chemical to Purchase First Vastopolis's Fertilizer Unit
May 10, 2011
Vastopolis -- Vastopolis Chemical Corp. plans to buy the fertilizer operations of First Vastopolis Corp. for about $147 million in stock plus the assumption of about $150 million in debt. In late-morning composite trading on the New York Stock Exchange Wednesday, First Vastopolis stock jumped $3 to $27. Vastopolis Chemical shares were up $1.375 to $22.625 on the Nasdaq Stock Market. Under terms of the agreement, reported after trading ended Tuesday, First Vastopolis of Jackson, will spin off its chemicals operations and related businesses to its shareholders. Those businesses will retain the First Vastopolis name. In exchange for the fertilizer business, First Vastopolis stockholders will receive 0.335 Vastopolis Chemical share for each share held, though the ratio is subject to adjustment. At that ratio, Vastopolis Chemical expects to issue 6.9 million shares valued at $147 million, or about 25% of its common shares outstanding. It also will assume about $150 million of debt. First Vastopolis's fertilizer business, which had sales of $224 million in its latest fiscal year, operates principally through its wholly owned Ampro Fertilizer unit, and a 50% interest in Triad Chemical. Vastopolis Chemical already holds the other 50% of Triad Chemical. Both Hepner and Triad are located in Donaldsonville, La.. Vastopolis Chemical, based here, has annual sales of about $420 million. It also will receive a 50% interest in an ammonia storage terminal in Pasadena, Texas, and a 50% stake in a partnership that owns and operates 11 ammonia barges. The transaction is expected to close by year's end.
