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Platform Specialty Products shares bounce as new CEO appointed

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Shares in Platform Speciality Products bounced after the agrichemical group unveiled as chief executive Rakesh Sachdev, who has a background in chemical sector mergers.

Mr Sachdev joins Platform, which owns crop protection group Arysta, from US-based chemical and biotechnology company Sigma-Aldrich, where he served during a period of rapid growth that saw a number of high-profile acquisitions.

Indian-born Mr Sachdev - who became chief executive of Sigma-Aldrich in 2010, after the death of the previous incumbent, Jai Nagarkatti - oversaw the company's acquisition by German chemical giant Merck.

Platform was founded in 2013, by veteran corporate raider Martin Franklin, who also owns frozen-food group Nomad, and has grown rapidly thanks to a spate of acquisitions.

In the year of its launch, Platform took on speciality chemical company MacDermid for $1.8bn.

In 2014 the group turned its sites on the agricultural chemical sector, snapping up Chemtura AgroSolutions for $1.0bn, Agriphar SA for E300m, and Arysta LifeScience for $3.5bn.

Debt fears

But the speed of acquisitions started to weigh on the company's share price this year, as the acquisition of chemical groups Alent and OM, and a downturn in overseas earnings, pushed its debt to earnings ratio above it target.

The company's tumbling share price was not arrested by the news in October that chief executive Daniel Leever was standing down, after issuing two profit warnings in two months.

Immediately after Mr Leever left, shares hit an all time low, down 67% from June 2015 highs, and 38% from their 2013 launch.

But the news of Mr Sachdev's appointment helped shares bounce.

Platform shares in New York were up 14% in midday deals, at $12.165.

Sector shakeup

This is a febrile time for the sector, after Dow Chemical and DuPont announced details of a planned merger, that will create the world's biggest agrichemicals and seed company.

A $130bn merger between the two companies will pave the way for the combined agricultural segment to be spun off, into a business with $19bn of sales, overtaking Monsanto and Syngenta.

The news followed months of speculation around a sector shake up, triggered by Monsanto's latest takeover bid of Syngenta.

The spate of deal talks is the result of falling profits in the sector, driven by low crop prices and currency effects.


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