September 26, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Biobest, a global leader in pollination and integrated biological pest and disease solutions, has raised  €120 million ($126.8 million) through a round backed by Tikehau Capital – which indicated that this investment was the first made through its private equity regenerative agriculture strategy – along with participation from M&G, Unigrains, Sofiproteol, and Biobest’s long-standing shareholders. 

“At Tikehau Capital, we firmly believe that investors bear a responsibility to actively contribute to global efforts aimed at mitigating agriculture’s impact,” said Emmanuel Laillier, head of private equity, Tikehau Capital. “We are excited to announce our first investment in Biobest, a project that seamlessly aligns with our private equity impact strategy. We remain committed to meeting the growing financing needs of companies dedicated to preserving soil health, offering sustainable products and advancing solutions that accelerate this vital transition.”

The company noted in a statement that the capital from this round will be used to fund its acquisition of Biotrop, a Brazil-based company specializing in biological solutions designed for crop nutrition and protection in open fields. 

“Biobest and Biotrop together will push forward a broad positive impact agenda: our crop protection portfolio provides sound alternatives to chemical pesticides and our biologicals directly contribute to mitigating climate change by reducing CO2 emissions and restoring healthy soils,” said Antonio Zem, CEO, Biotrop.

“By offering farmers the reliable biological solutions they need in combination with solid technical advice, we’ll build a virtuous cycle of loyalty driven by mutual business success and contributing to enhanced food security and a more resilient and sustainable agriculture.”

On Radar

A shrinking base of arable farmland, tight supply of traditional agricultural inputs over the past five years, a rapid emergence of regenerative ag practices leading to willingness by farmers to adopt new systems that can result in higher yields while being environmentally safe, and consumer sentiment calling for cleaner supply chains and less agrochemical usage have increasingly brought the biologicals category onto the radar of conventional global giants and investors, resulting in more significant funding rounds.

Agricultural pests are the root cause of social, economic, and health damage that account for $70 billion in crop losses in the U.S. alone. However, not only are traditional pesticides broadly harmful to the beneficial insects that happen to be present, but are also significantly harmful to our environment and human health – all while the targeted pests continue to become more resistant to our tools at-hand.

Additionally, agriculture, land use, and deforestation combined represent the second-largest source of global greenhouse gas emissions, are a significant contributor to the decline in biodiversity, and account for the usage of 70 percent of the available fresh water. 

As we are collectively facing these challenges, Tikehau Capital, together with AXA and Unilever, have partnered on investing in companies providing solutions to enable the transition of agriculture to regenerative practices, with the ambition to generate a positive impact on soil health and environmental resources.

Having a presence in more than 60 countries, Biobest is at the front of the wave in biological pest and disease control. This acquisition of Biotrop will work to cement Biobest’s position as a major player in South America while expanding its range of biological solutions to include biocontrol through beneficial insects and biopesticides, inoculants, biostimulants, and pollination services for both covered and open-field crops. At the same time, the deal will play a role in Biobest’s transitional arc from a horticulture biocontrol and pollination specialist to a biologicals player in agriculture.

Biobest will initially acquire 85 percent of the shares in Biotrop, based on an enterprise value of EUR532 million. The remaining 15 percent will be acquired following a transitional period of three years. 

”This is a landmark transaction for Biobest, building further on a successful M&A strategy in addition to healthy organic growth,” said Jean-Marc Vandoorne, CEO, Biobest. “The Brazilian market for biocontrol and other biologicals is currently estimated at more than USD1 billion. With an annual growth rate of 43 percent, powered by a supportive regulatory environment tailored to the needs of biological products – Brazil outpaces growth in any other major market.”

Vandoorne continued, “Biotrop holds a leading position in that market. Its strengths cover unparalleled new patent registrations based on extensive R&D, high-quality scalable production and a strong multi-channel go to market strategy. We’re delighted that Biotrop’s top-notch management team will continue to drive the company’s growth and become part of our global team.”

“We are thrilled to support Biobest in this transformative acquisition, which will reinforce its position as a global leader in the transition towards more sustainable agriculture,” added Laurent-David Charbit, co-head of Tikehau Capital’s private equity regenerative agriculture strategy.”

“The combined resources and expertise of Tikehau Capital, AXA, and Unilever will empower Biobest to expedite its global expansion and contribute significantly to the shift towards sustainable agriculture.” 

~ 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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