Aqua Capital and GIC exit Biotrop in €532m deal

Aqua Capital says it established Biotrop in 2017, instead of entering the market via an acquisition, due to a lack of reasonably priced companies with market presence and proprietary technology.

Sao Paulo-headquartered Aqua Capital has exited its investment in Brazilian biological inputs provider Biotrop through a €532 million sale to Belgian crop protection firm Biobest. Singaporean sovereign wealth fund GIC has also sold its stake in the business as part of the deal.

The deal features a two-stage close, with Biobest first acquiring an 85 percent stake in Biotrop, which is expected to complete by the end of the year. The company will acquire the remaining 15 percent stake following a three-year transition period.

Biobest will finance the deal through a capital raise that includes new investors Tikehau Capital, M&G Investments and Unigrains, as well as other investors close to the company’s majority owner, Belgian industrial group Floridienne. The round is valued at €400 million, according to Bloomberg.

“It has been an amazing journey, where in six years of ownership, we have been able to create a leading platform in this fast developing domain, driving sustainability and profits,” said Aqua Capital managing partner Sebastian Popik in a statement.

Aqua Capital established Biotrop in 2017 alongside Antonio Zem, a former executive with Philadelphia-headquartered crop protection company FMC Agricultural Products.

In 2019, following Aqua Capital’s $30 million acquisition of a majority stake in Brazilian biologicals provider Total Biotechnologia – which was merged with Biotrop –  Popik told Agri Investor the firm had opted to build Biotrop from scratch because it could not find any reasonably priced companies with market presence and proprietary technology.

“Sometimes we see this in some higher-tech, specialty segments, where there are many more interested parties wanting to acquire something – be it a controlling or minority stake – than there are good companies to be bought or sold,” he said at the time. “Biologicals clearly fits that pattern, both in Brazil and in the US.”

The deal gives Biobest a “major position in South America and to start its transformation journey from a horticulture biocontrol and pollination specialist, to a major biologicals player in agriculture, covering biocontrol, inoculants, biostimulants and pollination in covered and in open-field crops,” added the statement.

Biobest chief executive Jean-Marc Vandoorne commented: “The Brazilian market for biocontrol and other biologicals is currently estimated at more than $1 billion. With an annual growth rate of 43 percent, powered by a supportive regulatory environment tailored to the needs of biological products, Brazil outpaces growth in any other major market.”

Aqua Capital is currently in market raising its Fund III. The vehicle had raised at least $309 million from at least 24 LPs towards its $400 million target, according to May regulatory filings for three vehicles connected to the fund. A source told Agri Investor the firm had surpassed its target for Fund III.