Private equity funds put the focus on the Spanish agricultural sector
The Spanish agricultural sector has aroused the appetite of venture capital funds. Private equity funds have been involved in several takeover operations of some important companies in the last months, what some financial analysts see as the beginning of a trend which will increase.
F. García Ferrer, partner responsible for private equity funds of KPMG in Spain, explains this interest in the Spanish primary sector by “the existence of some local operators with high potential for product improvement, quality, innovation and, ultimately, the existence of added value for the final consumer, derived from their research and development capacity”.
García Ferrer points out the recent acquisition of the Spanish multinational Planasa by Cinven as a sing of the “clear commitment of private equity funds to an essential sector of the Spanish economy”. The purchase was made for €450 million. The Navarra-based horticultural company’s turnover is €109 million and has 2000 employees.
Also last October, the ADM Capital Partners fund closed the purchase of Innolive, one of the largest European producers of extra virgin olive oil in an operation valued €130 million.
In November 2016, the ProA Capital fund purchased Moyca, leader in the production of seedless table grapes. At the end of last year as well, Bridgepoint acquired Sapec Agro Business, specializing in herbicides and fertilizers.
The KPMG’s partner expects that the venture capital “will continue to show increasing interest in the Spanish agro sectors”. García Ferrer highlights the opportunities for equity funds as a “lever of growth” for the sector in Spain, as they’re a clear “incentive for diversification, internationalization and innovation, key aspects to be considered for a company to growth”. “Digitalization, climate change or Brexit are challenges which venture capital can help to face”.
Sovereign wealth funds and large pension funds are also showing their interest in investments in agro food companies. “This is an investment megatrend”, G. Colominas explains, a financial analyst at the Panda Agriculture & Water Fund, the first agricultural equity fund created in the Spanish market.