In a few words, I've always been a huge fan of operators that have the ability to acquire competitors or non-core assets from other companies, especially in the commodities space. Clearly, this move was an excellent way for Mosaic to geographically diversify its operations, supply chain, and cash flow generation. The unit also represents about 23% of the total annualized adjusted EBITDA that Mosaic generated in FY21. In other words, that translated to a 3x EBITDA purchase price based on just this year's worth of earnings. These results highlight the decisions we have made over the last decade that has strengthened the business." In 2021, Mosaic Fertilizantes was able to achieve its $200 million transformational EBITDA improvement target over a year ahead of schedule. In Brazil, Mosaic Fertilizantes generated adjusted EBITDA of $821 million, up 74% from the prior year as the team capitalized on strong demand, a trend that we expected and drove our decision to acquire Fertilizantes 4 years ago. While it did take some time to play out, Mosaic did eventually purchase the unit for a valuation of $2.5 billion.įast forward to today, Mosaic management updated analysts and investors that the same Brazilian unit was now generating incredibly strong operating performance: My argument for the purchase was that Mosaic was getting a good deal as the purchase price occurred at a time when fertilizer prices were cyclically weak. "We would be much more inclined to accumulate at $20 (or lower) as the risk/reward profile would be pretty solid over a 3-5 year timeframe."īack in 2016, analysts were also bearish on Mosaic's purchase of Vale's ( VALE) fertilizer unit claiming that Mosaic was overpaying, calling it to only be worth $1 billion."Even though potash and phosphate prices still remain relatively weak, we think stabilization will begin to develop with more substance over the intermediate-term."."Current valuation disregards the double-digit cyclically adjusted free cash flow yield.".Back in 2016, when the entire industry was in disarray, I argued that Mosaic was a buy here and here for a few core reasons: Total revenue increased to $12.36 billion and net income increased to $1.63 billion, which translates to $4.27 in diluted EPS.
The Mosaic Company ( NYSE: MOS) effectively knocked it out of the park with its FY21 operating performance. The Mosaic Company was incorporated in 2004 and is headquartered in Tampa, Florida.Mining of potash ore in an underground mine. The company sells its products to wholesale distributors, retail chains, farmers, cooperatives, independent retailers, and national accounts. In addition, it provides nitrogen-based crop nutrients, animal feed ingredients, and other ancillary services and purchases and sells phosphates, potash, and nitrogen products. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use and for use in the de-icing and as a water softener regenerant. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names, as well as produces a double sulfate of potash magnesia product under K-Mag brand name. The company operates through three segments: Phosphates, Potash, and Mosaic Fertilizantes. The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients in North America and internationally.
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