May 10, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

London-based ADM Capital Europe has acquired a majority stake in Withcott Seedlings, a major Australian vegetable seedling business, through its Cibus Fund II. 

The off-market transaction was initiated by Withcott Seedlings founders and shareholders who appointed Colliers Agribusiness to manage and complete the sale.

“The Colliers Agribusiness global database and staged process engaged with 73 qualified groups, 17 of which passed into the early stages and virtual data room to complete initial due diligence,” said Rawdon Briggs, head of agribusiness, Colliers.

“The proprietary process ensured a highly qualified and aligned preferred bidder closed and fulfilled our clients’ original instructions during the COVID-19 pandemic years,” added Briggs. “Colliers Agribusiness wishes to congratulate the Cibus Fund II LP team on this recent close of the Withcott Seedlings deal.”

Launched by ADM Capital in 2016, the Cibus Funds strategy specializes in making sustainable food and agriculture investments in mid-sized companies that are leading the future of food through innovation, disruption, increased resource efficiency, and sustainability.

A funding target of $800 million has been set across the two funds, with Cibus Fund II carrying expectations of raising $600 million, of which, the Los Angeles County Employees Retirement Association committed $80 million. 

To-date, the Cibus Funds have raised a combined $769 million, and has been allocating capital on a global scale across developed countries via two strategies: the private equity Cibus strategy, which predominantly invests in buyout and growth equity opportunities for mid-market companies; and the Cibus Enterprise strategy, which mostly invests in late-stage venture investments driving disruptive solutions in the agrifood tech space.

This investment in Withcott Seedlings represents the first majority investment to-date for Cibus Fund II. All told, it has made six other minority investments in its late-stage venture allocation, via Cibus Enterprise Fund II LP, according to a recent statement.

Founded more than 40 years ago and active across Eastern Australia, Withcott Seedlings is a major producer and supplier of vegetable seedlings to both field and glasshouse growers. Today, the company holds a significant presence in the nursery space and is a key agent in the Australian vegetable seedling market, with the capacity to grow approximately 350 million seedlings per year across a broad range of crop varieties.

“Withcott Seedlings is an exemplar in the field of vegetable propagation and has experienced positive change by embracing technology,” said Rob Appleby, CIO, The Cibus Funds. “Operational refinements and improved sustainability metrics made the company more resilient through the drought conditions of Australia and COVID-19. We are looking forward to partnering with the high-quality, experienced management team to take Withcott Seedlings to the next level.”

Through this partnership, Cibus Fund II and Withcott Seedlings will work together to enhance the application of technology and robotics to improve production efficiency, such as the automation of seeding, sorting, grafting, monitoring, watering, and feeding the stock.

Initial steps in this direction have already been taken by the company, which has previously introduced ISO Robotics’ (a Cibus Fund I portfolio company) propagation robots into its production methodology to positive results in product quality and efficiencies.

“At the Cibus funds, we partner with companies using innovative technology to disrupt food production, increase resource efficiency and ensure sustainability,” said Appleby. “We believe that the valuations of tomorrow will be higher for those companies with sustainability at their core.”

Withcott Seedlings’ business operations have been identified as having a strong focus on ESG, which aligns with the investment strategy adhered to by Cibus. Putting this shared philosophy into action, the new team will target environmental planting projects to facilitate strong growth opportunities in the carbon offset plantings market, capitalizing on the growing demand in Australia for environmental planting driven by upcoming carbon projects.

“This is an extremely exciting time for the Withcott Seedlings business and partnering with Cibus whose holistic vision for sustainable food production and technology, will propel this business to the next level,” said Mike Hindle, CEO, Withcott Seedlings. “In addition, the prospects of producing very large-scale numbers of tree seedlings for carbon offset projects and forestry plantings fits perfectly with our business model.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.