K+S Aktiengesellschaft and Potash One will acquire Potash One for $425m.
The companies have entered into a support agreement pursuant to which K+S will make an offer to acquire all of the issued and outstanding common shares of Potash One at a price of $4.41 a share.
The agreement provides customary deal protections including a non-solicitation covenant by Potash One and a five business day right for K+S to match any superior proposal received by Potash One.
The agreement also entails payment by Potash One to K+S of a termination fee of $16.18m if the offer is not completed in specified circumstances.
An affiliate of K+S has subscribed for $29.41m convertible secured debenture from Potash One.
The proceeds from the debenture will be used to fund immediate water infrastructure construction commitments related to the Legacy project located in the Canadian province of Saskatchewan.