London-based private equity firm, Bridgepoint, has agreed to acquire Sapec Agro Business, the agribusiness division of the publicly listed business group, Sapec, for €456 million (US$502 million).
Bridgepoint notes that debt for the transaction has been provided by BNP Paribas, Société Générale, Crédit Agricole CIB, HSBC, Rabobank and Mizuho.
Based in Portugal since 1926, Sapec Agro Business develops and produces crop protection chemicals including pesticides, herbicides, and fungicides and specialty crop nutrition products including fertilizers, micronutrients, and biostimulants targeted for high-value crops such as vegetables, fruit, and vineyards.
Over the past two years Sapec Agro Business has secured five patents, its latest patent being granted just this past June by the European Patent Office (EPO) for a new fungicide developed specifically for use in vineyards to control downy mildew, black-rot, and powdery mildew.
Marketing its products through two companies – Sapec Agro S.A. and Trade Corporation International S.A.- Sapec Agro Business saw sales totaling €223 million (US$245.5 million) across 70 countries last year making it the leading off-patent crop protection company in the Iberian market and the third largest in Spain.
“The performance of the Sapec Agro Business to date has been robust but it is now ready to accelerate growth and gain scale as its market consolidates,” noted Héctor Pérez, partner with Bridgepoint.
Indeed, this is a goal that was echoed by Eric van Innis, CEO of Sapec Agro Business, who will continue in his leadership role after the closing of the deal.
“The new shareholder shares our ambitions, and the goal is to accelerate the growth of our business by creating opportunities in new markets, launching new developments and new agricultural solutions for our customers,” said van Innis in a company statement.
Macro drivers, including a growing global population, a shrinking base of arable farmland, and shifting consumer demands for greater volumes of fresh produce, have created a market with great potential for growth for Sapec.
As farmers, particularly those in developing countries become more familiar with modern agricultural production practices, the agrochemical market, which was valued at US$207.5 billion in 2014 is expected to grow to a value of US$250.5 billion by 2020 according to the report, “Agrochemicals Market by Type (Fertilizers & Pesticides), Fertilizer Type (Nitrogenous, Potassic, & Phosphatic), Pesticide Type (Organophosphates, Pyrethroids, Neonicotinoids, and Bio-Pesticides), Sub-types & Crop Type – Global Trends & Forecast to 2020”.
In addition, the biostiumlants market is projected to grow at a CAGR of 10.4 percent, reaching a value of $2.9 billion by 2021, with the area of application expected to grow at a CAGR of 11.7 percent, reaching 24.9 million hectares by 2021.
Focusing on these dynamic segments of the agribusiness value chain, Mr. van Innis states, “These are very exciting times for Sapec Agro Business and its customers in a very attractive and growing market.
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Lynda Kiernan