News & Analysis

Advantage Capital makes second investment into botanicals

ACAP, the private equity fund backed by the USDA and funded by the Farm Credit System, has made its second investment into a manufacturer and supplier of bulk herbs and botanical products from Missouri.

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Advantage Capital Agribusiness Partners (ACAP), the private equity fund backed by the US Department of Agriculture and the Farm Credit System, has invested in American Botanicals, a manufacturer and supplier of bulk herbs and botanical products from Missouri.

The investment, made through parent company North American Natural Resources, is the second for ACAP which invested in chicken egg production company Iowa Cage-free at the end of the February.

The size of the deal is undisclosed, but “the business is a leading player in a highly fragmented market”, Hassler told Agri Investor in an email. “One of their competitive advantages is the breadth and depth of the relationships they have built with hundreds of suppliers and customers. Another is consistently high quality products.”

Founded in 1994, American Botanicals buys, processes, sells and exports hundreds of roots, herbs, barks and other botanical products, which are purchased directly from North America farmers and collectors and used in products ranging from foods to cosmetics and nutritional supplements by the company’s more than 400 customers, according to the company website.

ACAP launched through the USDA’s Rural Business Investment Program and is licensed as a Rural Business Investment Company by the USDA as part of a plan to help improve funding of the agriculture sector. The fund closed on $155 million last year after attracting commitments from nine farm credit institutions.

“The fund’s investment in American Botanicals is central to its mission of helping address the capital needs of rural American businesses by providing funding to accelerate growth and potential job creation,” said Tim Hassler, principal at Advantage Capital Partners, in a statement.

Brian Munzlinger, a Missouri State Senator, emphasised the importance of capital investment in rural businesses in a statement. “I understand the importance of this type of investment for reinvigorating America’s rural communities and I am excited to see these dollars being invested right here in Missouri,” he said.

Advantage Capital Partners was mandated to launch the 10-year Advantage Capital Agribusiness Fund in April 2014.