China’s Agria Corp’s rural services firm, PGG Wrightson, has acquired a 50% stake in the agri firm, Agrocentro Uruguay for an undisclosed initial payment and capped earn-outs over three years.
Wrightson has been doing business with Agrocentro since the group’s founding in 2007, and Agrocentro has grown to become Wrightson’s largest seed customer.
The purchase comes years after Wrightson sold its management contract with NZ Farming Systems Uruguay – a dairy farming operation it established in 2006 as a means of acquiring low cost land in Uruguay suitable for dairy production, and a means to export New Zealand farming techniques to South America. In 2012 Singapore-based Wilmar International bought 78% of NZ Farming Systems, and renegotiated the agreement with Wrightson to opt out of a preferred supplier agreement with the company.
Agrocentro has four business units including farming, agricultural inputs, logistics, and consulting, and has developed production technologies in meat and forage based seed production.
Twice this year Wrightson has upgraded its expected annual earnings forecast, projecting annual operating earnings before interest, tax, depreciation, and amortization (EBITDA) to be between $66 million and $69 million for the year ending June 30, up from $58.7 million for the previous year.