By Lynda Kiernan
We usually don’t hear much about ag or food deal activity occurring out of Romania, but the country was recently featured in a couple of newsworthy events.
Natural Food
Highlander Partners has acquired Romanian natural food company Sano Vita through its Romania-registered investment vehicle Roho Healthy Food Investments.
Approval for the acquisition has recently been received from the country’s Competition Council for the company that was founded by three local entrepreneurs: Cornel Soare, Ion Dan, and Dumitru Dan, in 1995 in the southern county of Valcea.
“Following a review of the transaction, the Competition Council has found that it does not raise significant obstacles to effective competition in the market, in particular by establishing or strengthening of a dominant position,” noted the regulatory body.
Based in Pausesti-Maglasi, Sano VIta employs 247 and sells organic and natural products including cereals, muesli, beverages, soy products, seeds, grains, whole pasta, flour, dried and candied fruit, and bee products.
For Highlander Partners, this is its ninth deal in the food sector, and its second deal in Romania overall.
Formed in 2004 in Dallas, Texas, and with offices in Warsaw, Poland, Highlander Partners targets private equity investments of between $10 and $50 million, and mezzanine investments of between $10 and $25 million in mid-sized companies with revenue in the $10 to $500 million window, and enterprise values of up to $100 million. Sectors of interest include food, manufacturing, healthcare, retail, and building materials.
Two previous Highlander Partners acquisitions shared by GAI News both occurred in 2016 when the fund acquired a majority stake in Polish supplier of meat products to the convenience food sector, QFG, in January, and a stake in London-based custom specialty ingredients supplier Fuerst Day Lawson Holdings Limited (FDL) in partnership with chief executive officer, Mac Mardi in February – both for an undisclosed amount.
Funds
In December 2019 it was announced that Holde Agri Invest, an agriculture-focused investment fund in Romania, pursued a private placement on the Bucharest Stock Exchange between December 18-20 with the goal of raising EUR 6 million (US$6.6 million) in exchange for shares totaling 45 percent of the company.
This announcement places Holde Agri Invest in the position of being the first agricultural investment company to list on the AeRO exchange.
With the capital, Holde Agri Invest plans to build out a farmland portfolio exceeding 25,000 hectares (61,776 acres), and stated that it expected to post returns between 12 and 13 percent per year generated from cropping, and another 6 percent generated from land value appreciation.
Certain investors already committed include Sacha Dragic, the founder of the gambling enterprise Superbet; Cornel Papa, a founder of the law firm Țuca Zbârcea & Asociaţii; and Claudia Bajiu, owner of the tour company Paloma Tours; and Vertical Seven Group, the fund’s largest investor, with a 25 percent stake.
Additionally, Romania’s Competition Council has also given approval to the CEE Investment Cooperation Fund II, a Chinese fund owned by the Bank of China, to acquire three agricultural companies in the country: Pasteur Filiala Filipesti – an animal medicine producer; Farmavet, an animal health distribution company; and select assets of the farming company Agrozootehnica Pietroiu.
In August of last year China’s CEE Equity Partners also announced an investment of €60 million (US$67 million) through China’s Central and Eastern Europe Investment Cooperation Fund II for the acquisition of 15 grain silos and logistics hubs in Romania, from the Brise Group, held by Bristol Logistics SA.
Romania is emerging as an important actor in international grain trade, serving as a channel connecting southeastern European producers with destination markets, particularly in the Mediterranean, the Middle East, and across the EU. Additionally, the country saw record breaking production for wheat, maize, and sunflower last year, with a total grain harvest of 31 million tons.
As one of the largest agribusinesses in this market, the Brise Group is using the funds to modernize and upgrade its business, with €25 million (US$28 million) being allocated to establish a new company in partnership with CEE Equity Partners, and the remaining €35 million (US$39 million) going to Brise Group itself, reports Romania Insider.
Through this investment CEE Equity Partners is investing in a purposely structured Romanian company for the modernization, integration, development, and construction of open access grain hubs and terminals.
Meanwhile, the deal will enable the Brise Group to focus solely on its grain origination and trading business once the divestment of its logistics hubs to Fund II is complete. From that point on, the company will be a grain origination client of Bristol Logistics’ infrastructure platform – a pioneer for Romania as it is open to all farmers and traders operating within the catchment areas served by Bristol Logistics’ network, according to a statement announcing the deal.
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.