Platform Specialty Products, which has been under pressure from activist investors, has announced it will split into two separate companies roughly equal in size. Specialty Chemicals is planned to incorporate the MacDermid Performance Solutions Arm, and the agrochemicals portfolio will be in the hands of current subsidiary Arysta, which is to be carved out and sold at auction.

The separation is due to take place some time next year and be carried out in a way that will give both companies appropriate post-separation balance sheets to facilitate independent access to capital for bolt-on acquisitions or strategic combinations within their respective markets. Earlier plans called for an outright sale of the agriculture business to an investor.

CEO Rakesh Sachdev described Arysta as a global, leading agrochemical company with a strong product portfolio, a preferred partnership position with discovery-based firms and a robust pipeline focused on fast-growing specialty markets, and MacDermid as a leading global specialty chemicals company that provides differentiated solutions and high-touch service in attractive, niche industrial and electronic end-markets.

Platform’s chairman, Martin E. Franklin, said the decision to auction off the agricultural business follows a “strategic review and discussions with the management teams and is seen as “the best way to maximize long-term value for shareholders.”  The company based in West Palm Beach, Florida, has “long felt that the highly specialized, diverse nature of the two businesses has been an impediment to investors’ full appreciation of the value of each asset,” he added.

Despite the upbeat tone, sources told the news agency Reuters that abandoning the sale plans represents a blow to Franklin, a co-founder of Platform Specialty – launched in 2013 as a vehicle to buy other companies. The “prolific dealmaker” reportedly spent $4.9 billion on acquisitions to put together the company’s agrochemicals unit.

Reuters said the change is also a disappointment for activist investor Bill Ackman, whose hedge fund Pershing Square Capital Management owns 14.5% of Platform.  Another activist investor, Elliott Management – parent company of London-based Elliott Advisors, which has been stirring up the waters in Europe – holds a 3.8% stake.

At least two consortia are believed to have been eyeing the agrochemicals business, including a private equity group led by Blackstone and CVC Capital Partners. and a duo of Indian agrochemicals producer UPL with buyout specialist New Mountain Capital.