October 9, 2019

By Lynda Kiernan

Sustainable food chain investor Paine Schwartz Partners and global fresh food company AM FRESH have announced that they are coming together to launch a leading table grape operating company. 

Under the terms of the deal, Paine Schwartz has invested in AM FRESH’s Special New Fruit Licensing (SNFL) subsidiary in exchange for a 30 percent stake in the new entity. AM FRESH and its heads, brothers Antonio and Álvaro Muñoz, will maintain a controlling position by holding the remaining 70 percent interest.

Founded in 1992, SNFL and its  best-in-class R&D innovation platform is ranked as the world leader in developing, licensing, and commercializing patented table grape varieties as measured by licensed farming hectares.

The investment by Paine Schwartz and the newly launched partnership will accelerate SNFL’s breeding, development, and registration, pipelines. As joint funders, the partners plan to advance farming on a global scale, and to foster commercialization to retail partners with comprehensive solutions via bespoke production and long-term continuity. With a common focus on the end-consumer, the partners aim to consistently deliver innovation, quality, and availability to its customer base to inspire optimized produce portfolios and improved production.

“We believe that in Paine Schwartz we have found the perfect partner to help us execute our strategic vision,” said Alvaro Muñoz, CEO, AM FRESH. “The partnership with Paine Schwartz is a catalyst for the execution of our global consolidation and vertical integration plans, enabling a faster transformation in the table grape sector globally with a focus on meeting the dynamic needs of growers, retailers and consumers, worldwide.”

Kevin Schwartz, CEO of Paine Schwartz Partners, noted how the common priorities and goals held by the two partners will also drive success for the venture, stating, “Paine Schwartz is excited to partner with AM FRESH to support the acceleration of multiple strategic initiatives for SNFL. We share a common passion for the global fresh produce sector and a common vision for the unique growth opportunities that exist for AM FRESH within table grapes.”

More Than Investment

This deal with AM FRESH echoes another recent deal announced by Paine Schwartz, and reflects the firm’s strategic intent to not only be an investor, but to be a catalyst and founder of new category-leading businesses.

Only weeks ago, Paine Schwartz announced that through its existing portfolio company Wawona Packing, it was partnering with both Wawona and Gerawan Farming to facilitate a merger that would result in the largest stone fruit producer in the U.S. 

Both third generation family-owned businesses located in the Central San Joaquin Valley, Fresno-based Gerawan is a pioneer in the stone fruit industry, including a best-in-class farming operation growing peaches, plums, and nectarines, harvesting and processing as many as 100,000 boxes of premium fruit per day. The company also has packing activities, and proprietary varieties that are marketed under the Prima® brand. Cutler-based Wawona Packing is a supplier of high-quality stone fruit, and a leading supplier in the organic sector of the category. 

The resulting company, which brings together Gerawan’s 200 employees and Wawaon’s 1,400 employees, will be led by Dan Gerawan as its largest individual shareholder and CEO, and will build upon the legacies and reputations of each of its partner-companies to create a strong platform from which to grow and innovate.

With Backing From Rhode Island

The announcement of Paine Schwartz’ partnership with AM FRESH also comes just days after Paine Schwartz announced the closing of its Food Chain Fund V at $1.425 billion, representing the firm’s largest fund to date, having exceeded its original funding target of $1.2 billion due to high demand and strong support from its investors. 

Concurrently, Fund V announced a significant commitment of $50 million from the Rhode Island State Investment Commission, Providence, which manages $8.3 billion in assets with a 6 percent allocation to private equity as of April 30. 

“We have seen an increasing number of institutional investors focused on the food and agribusiness opportunity set, along with the need for sustainability, which is synergistic with driving positive investment outcomes in this sector,” said Schwartz. “We have built a leadership position and successful track record in this area over two decades, and look forward to continuing that execution with Fund V.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.