Bloomberg — Biobest Group NV, a Belgian developer of biological crop-protection products, agreed to buy Biotrop Participacoes SA, a provider of biological and natural farming solutions in Brazil, for an enterprise value of about €532 million ($570 million).
Biobest will first acquire an 85% stake in the Vinhedo, Sao Paulo-based company, in a transaction expected to be concluded before the end of the year, according to Biobest Chief Executive Officer Jean-Marc Vandoorne. It will purchase the remaining stake over three to six years.
With the acquisition, Westerlo, Belgium-based Biobest will add Brazil to the roughly 30 other countries in which it operates. The firm specializes in biological-control products for horticulture using insects and mites, and the transaction gives it access to technology developed by Biotrop that uses microbes such as fungi and bacteria as pesticides and growth stimulants for row crops such as corn and soybeans, according to Vandoorne.
The Brazil market is valued at about $1 billion, with an annual growth rate of more than 40%. “The deal is complementary in every way,” Vandoorne said in an interview.
Founded in 2017, Biotrop has a presence in eight countries and expects revenue of 679 million reais ($136 million) this year, with 90% coming from Brazil. Biobest generated €323 million in revenue last year.
Sellers include Aqua Capital, a Brazilian private equity firm that specializes in the agribusiness sector; GIC, Singapore’s sovereign wealth fund; and the firm’s managers and founders. Aqua Capital has a controlling stake.
“The deal was fantastic for us,” said Sebastian Popik, managing partner of Aqua Capital, which has $1.1 billion under management.
Popik’s private equity firm focuses its investments in sustainable agriculture in the Americas, which he said reduces carbon dioxide emissions compared to chemical pesticides and increases productivity.
Capital Raise
Closely held Biobest will finance the transaction with a capital raise of about €400 million in which some of its current shareholders will participate. They include Sofina SA, several wealthy Belgian families, and the company’s management.
New shareholders include Tikehau Capital SCA, M&G Investments Ltd., Unigrains SA, Sofiproteol SA and several families close to its majority shareholder, the holding firm Floridienne SA/NV, which has a 78% stake. Floridienne’s stake will be diluted by the capital increase.
Morgan Stanley was Biobest’s financial adviser on the acquisition and Berenberg Bank advised Biobest on the equity financing. Banco Itau BBA was Aqua Capital’s adviser.
Read more at Bloomberg.com