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Pershing Square Increases Stake in Platform Specialty Products

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Pershing Square and Platform Specialty Products

Pershing Square added to its stake in Platform Specialty Products (PAH) in the fourth quarter ended December. The fund owned 42,737,394 shares in Zoetis according to its latest filing. This is up from  33,333,330 shares in the third quarter. The position accounts for 6.21% of the fund’s total portfolio.

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Overview of Platform Specialty Products

Platform Specialty Products is a global, diversified producer of high technology specialty chemical products and a provider of technical services. Its specialty chemicals are sold in multiple industries, including agriculture, electronics, graphic arts, metal and plastic plating, and offshore oil production and drilling.

It has the following three operating segments:

  • Performance Materials
  • Graphic Solutions
  • AgroSolutions

PAH expands through acquisitions

Pershing Square noted that PAH’s business model has supported investments in acquisitions, which have helped expand its specialty chemicals portfolio.

In October 2014, PAH completed the acquisition of Europe-based agrochemicals group Agriphar for a price of around $370 million. Agriphar provides a wide range of herbicides, fungicides, and insecticides throughout Europe.

PAH also completed its acquisition of Chemtura AgroSolutions, a niche provider of seed treatments and agrochemical products. In October, PAH announced the acquisition of Arysta LifeScience for about $3.51 billion. Arysta is a global provider of crop solutions and is known for agrochemical and biological products.

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PAH to benefit from agrochem portfolio

Pershing Square says that PAH’s agricultural chemicals portfolio is a growth catalyst, considering the increasing demand for food globally.

PAH’s agrochemical peers DuPont (DD), Monsanto (MON), and Dow Chemical (DOW) make up ~28% of the iShares U.S. Basic Materials ETF (IYM). PAH accounts for 0.50% of this ETF and 0.33% of the Vanguard Materials ETF (VAW). It also has a minor 0.02% exposure to the iShares Russell 1000 Growth ETF (IWF).

PAH said it saw net sales for 4Q14 grow 47.7% to $273.6 million, compared to $185.3 million in the fourth quarter of 2013. It posted a higher fourth-quarter net loss of $266.7 million, compared to a loss of $200.1 million in the year-ago period. It said the acquisitions of CAS and Agriphar have been a chief contributor to the results.

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