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June 28, 2010 5:05 PM

Kirkland, Brown Winick on $1 Billion Herbicide Deal

Posted by Claire Zillman

Tel Aviv-based Makhteshim Agan Industries, the world's leading generic crop chemical maker, will buy privately held herbicide supplier Albaugh Inc. for about $1 billion.

Makhteshim announced Monday it had signed a letter of intent to pay $340 million in cash for Albaugh, plus $455 million in seven-year promissory notes, 59 million common shares of Makhteshim, and the assumption of $280 million of Albaugh debt.

Albaugh--founded in 1979 by sole owner Dennis Albaugh--is one of the biggest crop-protection chemical makers in the U.S., Mexico, Argentina, and Brazil. It owns a Glyphosate synthesis plant and nine high-speed packing lines in Ankeny, Iowa, where the company is headquartered.

The purchase of Albaugh fits into Makhteshim's plan to strengthen its foothold in the Americas, according to the company's statement. Makhteshim posted losses in two of the last three quarters and is looking to increase profits after insecticide prices sank as farmers cut production during the global recession, Business Week reports. The combined company, The New York Times reports, would have $3.1 billion in sales.

Kirkland & Ellis partners David Fox and Kimberly Taylor in the firm's New York office represented Makhteshim on the acquisition. Fox says the firm has represented the Israeli company in the past. Makhteshim senior vice president and general legal counsel Michal Arlosoroff also worked on the deal for the company. 

Albaugh turned to vice president Stuart Feldstein and Des Moines-based Brown, Winick, Graves, Gross, Baskerville and Schoenebaum for counsel. The Brown Winick team was made up of partners Michael Blaser, John Hunter, and Harold Schneebeck, and associates Amy Piepmeier and Amy Adams. 

The deal is expected to close in the fourth quarter of this year. Upon completion of the transaction, Dennis Albaugh will be named chairman of North America for the combined group.

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