Company is valued at around R$3bn; private equity fund hired Itaú BBA to prospect interested parties
08/08/2023
Aqua Capital put the biological agricultural inputs company Biotrop up for sale, sources familiar with the matter say. The company is valued at around R$3 billion.
The private equity firm — which buys stakes in companies – hired Itaú BBA to prospect interested parties, managing to attract the attention of local and foreign investors. The firm also does not rule out disposing of part of the company, depending on the value attributed to the asset.
Engagement for the sale of the company takes place amidst a boom in the agribusiness sector in Brazil, mainly in agricultural inputs. One of the bets to attract buyers is that, with the war between Russia and Ukraine, the global dependence on fertilizers for biological inputs has increased.
According to sources, the process has approximately 10 interested parties, including international ones, at a time when Brazil has once again attracted global attention.
Biotrop was created internally at Aqua, in the countryside of São Paulo, in partnership with biologist and now company president Antônio Carlos Zem, former chief executive of fertilizer company FMC.
Since 2021, GIC, Singapore’s sovereign wealth fund, has bought a minority stake in the company — at which point Aqua, which remains in control of the business, left.
The company is expected to end this year with an EBITDA of R$200 million.
Aqua Capital, which Sebastian Popik founded in 2009, is a private equity firm specializing in the agribusiness and food value chain with around R$4 billion under management.
Biotrop belongs to Aqua’s Fund 2, the same portfolio as Agrogalaxy, which is worth around R$830 million at B3. The same fund invested in the animal nutrition company Yes Sinergy, which was sold to the French group Olmix last July. Aqua and Biotrop declined to comment.
Aqua Capital specializes in making small investments in sectors considered niches with growth potential. At AgroGalaxy, the fund’s exit door was the company’s IPO in July 2021. With the company’s shares dropping in recent months, Brazil’s financial market took as a sure thing the sale of part of the company or a merger with an industry rival.
In his first interview with Valor as CEO last July, Welles Pascoal predicted a recovery in the sector. He stated that 2023 would be a year of adjustments. He also said there was an expectation of leveraging retail sales in the coming months. “This is a year of transition and adjustments for the production chain, especially for distributors. In Brazil, the input market consolidation process is lagging but will pick up again,” he said.
This year, AgroGalaxy’s business suffered the effects of the war in Ukraine, high-interest rates, and falling commodity prices, which contributed to increased defaults and contract deferrals between the company and producers.
*Por Fernanda Guimarães, Mônica Scaramuzzo — São Paulo
Source: Valor International