January 25, 2021

By Lynda Kiernan, Global AgInvesting Media

Paine Schwartz Partners established Verdesian Life Sciences in 2012. Since then, the portfolio company has completed six add-on acquisitions and has developed best-in-class patented biological, nutritional, fertilizer enhancement, seed treatment, and inoculant technologies for the high-value specialty and row crop, ornamental, and turf markets. 

Geographically, the company expanded into new markets, including South America; expanded its global team to more than 240 individuals; and has filed more than 290 patents since 2014 as its diverse portfolio of plant nutrient offerings and strong financial foundation gave the company what it needed to scale the business and position itself for future growth.

This success reflects Paine Schwartz’ thesis-driven investing approach in action.

“We have always had a thesis-driven approach to investing in the food and ag value chain,” Kevin Schwartz, CEO, Paine Schwartz told GAI News in November 2019. “We’ve developed processes, after more than a decade of deploying capital, which start with longer-range research projects that are global in scope and help to identify pockets of growth and opportunity for investment.”

“We’ve done two of these substantial research projects over the last 10 years,” Schwartz continued, “they are 9 to 12 months of work for our internal team, and we also leverage some third party relationships – that we call Ag 2020 and Ag 2025. These create a roadmap for the opportunity set that we want to pursue in the portfolio construction of the funds. We constantly do detailed research on specific segments of the value chain and on specific investment opportunities.”

One such platform Paine Schwartz identified as carrying importance and potential for the agribusiness value chain was plant health and nutrition.

“Our success with Verdesian, from creating the platform to building it into an important market-leader, is another validation of our thesis driven approach to investing in agribusiness,” said Schwartz. “We identified plant health and nutrition as important aspects of the agribusiness value chain and as areas that align closely with our sustainability strategy in the sector.”

“We were able to help Verdesian capture opportunities through key strategic acquisitions and substantial investments across the platform. AEA Investors will be a great partner for the company and we are confident that Verdesian will continue to thrive and create enormous benefits for farmers and the environment in the years ahead.”

Today, news is being shared that Verdesian has entered into a definitive stock purchase agreement with funds managed by AEA Investors, providing an exit opportunity for Paine Schwartz.

AEA Investors was founded in 1968 by the Rockefeller,  Mellon, and Harriman family interests and S.G. Warburg & Co. as a private investment vehicle for a select group of industrial family offices. Over the years, AEA has built out a notable global network of business executives, industrial families, and leaders who invest with AEA as individual investors, serve on its portfolio company boards, or act in various advisory roles. The firm invests across three pillars: value-added industrials, consumer, and services, and manages funds with more than $15 billion of invested and committed capital including the leveraged buyouts of middle market companies, small businesses, and mezzanine and senior debt investments.

“We believe Verdesian’s leading product suite, R&D capabilities, entrepreneurial and customer-focused culture, and industry leading management team truly differentiate the company from its peers and create a strong platform from which to grow and expand,” said Rahul Goyal, partner, AEA.

“AEA is the right partner to help us continue scaling Verdesian and doing what we do better than anyone else: offering Nutrient Use Efficiency technologies for growers all over the world,” said Kenny Avery, president and CEO, Verdesian Life Science, who will continue to lead the company following the close of this deal.

Avery continued, “With AEA, we are gaining a global partner who recognizes the potential of our products and will support our growth, both organically and through strategic investments, in North America and around the world. We are proud of what we have accomplished since our founding and have had a very successful partnership with Paine Schwartz. Looking ahead, we are excited to work with AEA as we continue to provide critical products to farmers that increase their productivity, profitability and ability to do so sustainably.”

Goyal added, “The company has considerable opportunities ahead as the need for greater productivity and more sustainable farming practices drives global demand for Verdesian’s Nutrient Use Efficiency solutions. We look forward to partnering with Kenny and the entire Verdesian team to help the Company take the next steps in building on its portfolio of plant health and nutrition products both organically and through strategic acquisitions around the world.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.