Agro Nica to raise $60m to invest in Nicaragua, Andean cacao farms – exclusive

The firm is targeting PE groups focused on large-scale agribusinesses, impact funds and family offices as it sets its sights on sustainable cacao.

Agro Nica Holdings, a Nicaragua-based large-scale sustainable cocoa platform, is looking to raise $60 million in expansion financing to fund its cacao investments in Latin America.

The company has engaged New York boutique investment bank Aldwych Capital Partners as its sole advisor for the fundraising, Agro Nica’s David Glossinger told Agri Investor. Targeted investors include institutional private equity groups focused on large scale agribusinesses, large impact funds, as well as big family offices, Aldwych managing director Mark Bishop said.

The $60 million financing will be used to support the company’s addition of about 7,500 net hectares, of which 2,500 hectares will be located in Nicaragua and the rest in the Andean region.

Founded in 2012, Agro Nica was formed by a US group with a French family based in Nicaragua, all with extensive agriculture backgrounds. It currently operates 2,500 net hectares of cacao plantations in Nicaragua, making it the largest operator in the country.

About a year and a half ago, Agro Nica raised approximately $14 million from a number of high net worth individuals to “roll out the project and to show proof of the concept” in Nicaragua, Glossinger said.

The company is currently planting at the rate of 800 hectares per year and all land will be planted by early 2017. Glossinger told Agri Investor that the French group that co-founded Agro “has been doing business in Nicaragua for about 40 years and it’s extremely experienced in permanent crops.”

Out of the total target size of 10,000 net producing hectares among two countries, each country will have a 2,500 hectare “core” asset to which roughly 2,500 hectares in the form of an additional expansion plantation will be added, Bishop told Agri Investor. Agro Nica will acquire 8,000 to 9,000 hectares of land upon the closing of the second phase of fundraising.

Bishop said the next big trend is sustainable cacao, where global demand currently exceeds supply, making it a good time to enter the business.

According to Aldwych, Latin America accounts for roughly 50 percent of sustainably-produced cocoa globally. However, Bishop said, there is not enough capital flowing into this space, mainly because it is a very niche market. A large part of it is also located in West Africa, where cacao farms are small and regulations make it very difficult for investors to enter the market.

Glossinger said the company will start due diligence trips soon.