September 28, 2016

Paine & Partners, a private equity firm focused on investing in the global food & agribusiness space, recently announced its acquisition of The Global ID Group, a platform focused on providing testing solutions for critically important food safety and quality assurance measures. This acquisition marks the fifth company added to the company’s Fund IV portfolio, which closed in January 2015 for $893 million.

Based in Fairfield, Iowa, Global ID Group offers food safety and quality testing services in North America, South America, and Europe across three platforms. The Genetic ID platform offers testing services for GMO, pathogens, gluten content, animal specification, and food authenticity. The CERT ID platform administers food safety and quality certifications, including non-GMO testing, along with customized consulting services. The FoodChain ID platform provides technical services for the Non-GMO Project, and has verified more than 95 percent of the Non-GMO Project verified market in North America.

Angelos Dassios, Partner at P&P, commented that, “We have seen the increasing focus on food safety at several of our portfolio companies firsthand, which led to our team strategically developing a deep understanding of the food safety and testing sector. As one of the largest food and agribusiness focused private equity firms, we intend to be a strong, value-added partner to Global ID. Given rising consumer awareness, the globalization of the food chain and the increasing complexity of the regulatory environment, we see strong tail winds that will support Global ID’s growth as an industry leader. We are enthusiastic about partnering with the Global ID management team to achieve their organic growth and acquisition ambitions, and look forward to capturing the opportunities that lay ahead.”

Winds are certainly blowing in the right direction for those well-positioned in the non-GMO market. In the 2010-2014 period, Whole Foods Market recorded 426 percent growth in non-GMO dollar sales-nearly six times greater than the growth in organic sales, with sales growing an additional 16% in 2015. Outside of Whole Foods, sales of Non-GMO products have followed a similar trend. Packaged Facts estimates that non-GMO sales will continue growing globally at a rate of 15 percent annually through 2019. Global Non-GMO product sales were estimated to be valued at $550 billion in 2014, with sales in the U.S. totaling $200 billion. While this number can seem staggering, it only represents 10 percent of the $5 trillion-plus global food and beverage market.

In addition to the food testing space, Paine & Partners Fund IV holds investments across the upstream and midstream value chain, including seed production through Suba Seeds and crop pest management through AgBiTech. The Fund has also invested in crop and animal protein production through its acquisitions of Spearhead International and Meadow Foods. The acquisition of Global ID marks the Fund’s first acquisition of a U.S.-based company, the majority of which are based in Western Europe.

—

Eric Francucci