October 27, 2017

ADM Capital Europe LLP announced that its Cibus Fund has acquired a majority stake in Olivos Naturales (Innoliva), one of the largest European producers of extra virgin olive oil, for an undisclosed amount.

Based in Pamplona, Spain, and founded in 2006, Innoliva is a pioneer of super-high density olive production on its 5,000 hectares of olive groves located in Spain and Portugal. Traditionally, dry-farmed oil olive plantations in the Mediterranean planted trees at a density of between 12 trees per acre to 50 trees per acre. However, in the 1980s researchers and farmers in Spain and Italy developed irrigation systems, specialized varieties, and pruning methods that allowed for planting densities of up to between 150 and 300 trees per acre, according to Paul Vossen, author of History of Olive Orchard Planting Density.

Through its operation, Innoliva produces up to 9,000 tons of Extra Virgin Olive Oil per year with 98 percent of its output rating at acidity level of 0.2 percent or less. Extra Virgin Olive Oil needs to attain acidity levels of less than 0.8 percent to earn the classification, with lower acidity being associated with high values, indicating that Innoliva achieves both high production levels while maintaining a high-value product.

“Innoliva’s production costs are among the lowest in the industry, an achievement made possible by the Company’s innovative and pioneering use of production and processing technology,” said Gavin Sasson, partner, senior investment director, ADM Capital Europe LLP. “These attributes are at the core of the Cibus Fund’s investment remit

A Second for Cibus

London-based private equity and advisory firm ADM Capital announced in May the first $100 million close for its global agribusiness investment vehicle, The Cibus Fund.

Led by ADM Capital co-founder Robert Appleby and Jason Silm, former head of Agribusiness Investment at VTB capital and director at Macquarie Agricultural Funds Management, the fund aims to capitalize upon the significant investment opportunities generated by the ongoing evolution occurring in global demographics and trade patterns, and the inability to meet growing regional demand for high-value foods by some of the world’s fastest growing economies.

Toward this end, ADM Capital told GAI News earlier this year that the “sweet spot” for The Cibus Fund will be in producers and processors that are seeking growth capital to achieve greater value through both horizontal and vertical integration in the supply chain.

Under the structure of the fund’s investment thesis, 90 percent of The Cibus Fund will be earmarked to invest in mid-market companies posting an EBITDA in excess of $3 million; investing between $10 million and $75 million (average $45 million) across 10 or 11 deals. For this majority portion of the fund, ADM Capital will be targeting an internal rate of return of between 20 and 25 percent and a return on invested capital of 3x, according to the company.

The remaining 10 percent of the fund will be allocated toward a secondary mandate set to invest in ‘high-growth’ companies in the agtech sector in the same geographies of Europe and Australasia, according to ADM Capital, which notes that the high growth portion of the fund will not be making venture investments, but will be aiming to make average investments of $7 million in Series C and D rounds across seven commercial enterprises with proven positive revenue flows.

Although not able to disclose investment amounts due to confidentiality agreements, ADM Capital did inform GAI News that the fund has attracted high quality cornerstone investors that include Arch Capital Group Ltd., an unnamed U.S.-based pension fund, and ADM Capital. Continuing to target a wide range of global institutional investors, the fund is targeting a $500 million close in 2018.

This investment in Innoliva is the second made through Cibus to date.

“We are delighted to announce The Cibus Fund’s acquisition of Innoliva,” said Rob Appleby, co-founder and joint chief investment officer, ADM Capital. “The company’s pioneering Extra Virgin Olive Oil production technologies have positioned it as one of the world’s most sustainable and lowest-cost producers of consistently high quality Extra Virgin Olive Oil. Our investment underlines our commitment to investing in industry leaders who place innovation and sustainability at the heart of their business, and whose goal is to help solve global food supply and demand imbalance.”

-Lynda Kiernan