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Inflexion carves out GfK’s agri data business

The private equity firm moves into agriculture, while keeping its wider focus on data and technology.

UK-based investment firm Inflexion Private Equity will carve out international market researcher GfK’s animal and crop health business, in the firm’s first agricultural investment. GfK animal and crop health global director Stephen Hearn has partnered with Inflexion to buy back the company in a deal expected to be completed in the first quarter of 2016.

Hearn founded the subsidiary GfK Kynetec, formerly Dmrkynetec Limited, which has been part of GfK  since 2009. He will take about 220 employees with him, according to a GfK press release. Monsanto, John Deere and Bayer Animal are some of the blue chip firms on Hearn’s client list.

Inflexion’s managing partner John Hartz told Agri Investor that that the move is in line with Inflexion’s technology and data investment strategy. He said that the agricultural data division of GfK, which will be fully rebranded as part of the acquisition, will be “a growing platform through which to acquire further acquisitions in the data area”.

“There is a requirement in agricultural markets in terms of optimising use of fertilisers and pesticides,” said Hartz. “The cost of agricultural chemicals is high, therefore getting the best uses out of them is something that the industry needs. Hence there is a lot more IT going into agriculture.”

Hartz said investors included insurance companies but would not disclose which. The firm completed the carve-out of insurer RSA’s engineering, inspection and consultancy division at the beginning of November.

“Carve-outs though from corporates are highly complex. You have to be very sensitive to the corporate’s timelines and information flows.”

Hartz said that the team at Inflexion had also built up a strong relationship with Hearn before the deal was negotiated. He added that Inflexion was particularly suited to negotiating carve-outs:

“It’s not for people who don’t have a lot of resources, and Inflexion has lots [of those]. And this one was very complicated, being cross-border and relevant to many different jurisdictions.”

The new company will continue to research in animal health, crop protection, farm machinery and equipment, seed and biotech, as well as fertilisers. Additions to Inflexion’s portfolio this year include CloserStill Media, Alcumus and Mobica, all technology or media-associated companies.