May 9, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Founded in 2000 by Romanian entrepreneur Jabbar Kanani, Ågricover has two main business units: an agricultural inputs distribution division, and a specialized financing platform for farmers provided by non-banking financial institution Agricover Credit IFN S.A.

In 2017, the European Bank for Reconstruction and Development became a key shareholder in the group through a significant institutional investment giving the bank a 12.72 percent stake in the company. This was followed in 2019 when Adama Agriculture BV invested in Agricover Distribution, gaining a 10 percent share in the business. 

A few years later, in 2021, the company expanded, adding a service platform called crop360, which provides farmers the latest in digital ag innovations along with online sales and banking interactions, making the company a prominent player in Romania’s agricultural and agribusiness space. 

Now, the company is on the move again seeking to raise EUR 85 million (US$93 million) through one of the largest initial public offerings (IPOs) ever pursued on the Bucharest Stock Exchange (BVB). 

“Despite facing unprecedented challenges in recent years, Agricover has consistently delivered improved financial results and captured a growing market share,” said Jabbar Kanani, chairman of the board, Agricover Holding, who currently holds 87.269 percent of the company. 

“As part of our sustainable development strategy and aligned with our ambition to define the agriculture of tomorrow, we are thrilled to announce our intention to list Agricover on the Bucharest Stock Exchange. Building on our successful EUR40 million bond issuance from 2021, our goal is to raise further capital for development and welcome new investors into our journey towards success.”

The prospectus for the IPO, which began on May 4 and will end May 16, has already garnered approval from the Romanian Financial Supervisory Authority. Through this process, Kanani will sell up to 404.3 million existing shares, and the EBRD will sell up to 151.2 million existing shares with a subscription price of 0.5 lei (US$0.11) per share, for a maximum of 416 million lei. 

Agricover is approaching this IPO from a strong position, holding a 15.9 percent market share in crop protection products, 9.5 percent of the certified seed market, and 8.4 percent of the crop nutrition products market for 2021, as well as 6.9 percent of the total agricultural loans in Romania as of December 21, 2022. 

Despite multiple disruptions on the global and local levels, over the past three years the company has proven to be particularly resilient, posting a CAGR of 19.1 percent, 2022 revenues of approximately RON 2.55 billion (US$57 million), and net profits of RON 91.3 million (US$20.35 million). 

With the capital earned through this IPO, Agricover explained that it intends to support the envisaged growth strategy of the Group.

“Over the course of two decades, Agricover has been a steadfast supporter of farmers, providing them with access to input technologies, financing solutions and emerging digitalization, which promote sustainable and responsible agriculture in Romania,” said Kanani. 

“Our unwavering commitment to sound corporate governance principles, pragmatic and prudent management, transparency, and accountability has helped us emerge as a prominent player in the Romanian agricultural sector.”

~ Lynda Kiernan-Stone is editor in chief 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.

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