Archer Daniels Midland Co. (ADM) announced that it has agreed to terms granting exclusivity in discussions to purchase Neovia, a global provider of value-added animal nutrition solutions headquartered in Saint-Nolff, Britanny, France, with 72 production facilities and a presence in 25 countries.

The 100% cash deal has an approximate enterprise value of €1.535 billion, subject to customary adjustments.

Founded in France in 1954, Neovia manufactures and sells a range of nutrition solutions for the feed industry, with business lines that include premix and value-added services, pet care, additives and ingredients, aquaculture and complete feed, as well as analysis and field support.

The company, which is currently majority owned by French agricultural cooperative group InVivo, has about 8,200 employees and had global sales of €1.7 billion in 2017. It has extensive innovation capabilities, with 11 research and development centers in six countries. With a very limited presence in the U.S. and more than 75% of its sales coming from outside Western Europe, the company's footprint complements ADM's, according to the announcement.

“The acquisition of global leader Neovia would represent a transformative step for our Animal Nutrition business and a major strategic investment in France,” ADM chairman and chief executive officer Juan Luciano said. “At ADM, everything starts with the farmer, and we are eager to deepen our relationships with French farmers and French agriculture as we bring together the resources, technologies and expertise of two great companies. We look forward to working with them to leverage their global presence, integrated value chain and world-class innovation to reach new markets and new customers together."

Luciano continued, “Neovia is a major global provider of animal nutrition solutions, with significant operations in Western Europe, South and Central America and Southeast Asia. Combining Neovia's global presence and product and innovation expertise with our own growing Animal Nutrition footprint and capabilities would create one of the world's leading animal nutrition providers capable of offering complete solutions for customers around the globe — and would be the ideal platform for future growth.”

“This transaction is a great opportunity for both Neovia and ADM to establish what will be a global leader in animal nutrition solutions," InVivo CEO Thierry Blandinieres said. "ADM will pursue partnerships with French cooperatives and reinforce its relationships with the French agricultural world. At the same time, and in line with our strategy '2025 by InVivo,' the sale of Neovia will enable us to accelerate our transformation by favoring investments in our growth levers: agriculture, agribusiness and wine and retail and digital -- in France and abroad.”

Over the last four years, ADM has undertaken the most extensive portfolio transformation in its 115-year history. In its Animal Nutrition business, ADM has added premix and aquaculture capabilities in Asia, built modern new facilities in North America and moved into pet treats in 2017. Earlier this year, ADM combined its human and animal nutrition businesses into a single business unit that offers complete nutrition solutions.

Under French law, the signing of an acquisition agreement is contingent upon informing and consulting with relevant employee representative bodies. Subject to that process and regulatory approvals, the acquisition is expected to close by the fourth quarter.

Lazard is acting as financial adviser to ADM, and Baker McKenzie is acting as legal advisor.

“This is an important addition not only for our Animal Nutrition business but for our entire integrated Nutrition platform,” said Vince Macciocchi, ADM senior vice president and president, Nutrition. “In recent years, health and wellness trends in human nutrition -- such as clean-label, natural ingredients and innovative solutions -- are being echoed in animal nutrition. With Neovia, we will have global capabilities that span human and animal nutrition, expanding our reach and enhancing internal efficiencies. From colors and flavors to enzymes and bioactives, our new integrated nutrition platform will offer an unparalleled array of ingredients and solutions to meet customer needs.”

ADM is one of the world’s largest agricultural processors and food ingredient providers, with approximately 31,000 employees serving customers in more than 170 countries. Its global value chain includes approximately 500 crop procurement locations, 270 ingredient manufacturing facilities, 44 innovation centers and a premier global crop transportation network.