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Oaktree-backed AGRO Merchants buys Grocontinental

The US company's deal for the UK-based cold storage provider is its third European acquisition this year.

AGRO Merchants, a US-based cold storage and logistics solutions provider backed by Oaktree Capital Management, continued to expand its international presence, this time with the acquisition of Grocontinental, a UK-based cold storage provider.

“This transaction is the culmination of a process that for me began more than three years ago,” said Carlos Rodriguez, AGRO Merchants’ chief executive. “When we founded AGRO in 2013, I quickly identified Grocontinental as the ideal potential partner in England to join our network.”

Based in Whitchurch, Shropshire, Grocontinental, which was founded in 1941, provides cold storage and logistics services to the food industry with particular expertise in the dairy and meat sectors, according to the company. It operates from a purpose-built 35-acre complex and has a warehouse capacity of 197,000 pallets and owned transport solutions.

David Grocott and Linda Grocott, third generation owners of Grocontinental, will continue to lead the company as joint managing directors, AGRO Merchants said.

AGRO did not disclose financial details of the transaction. A spokesperson for the company had not responded to a request for comment by the time of publication.

Deal spree

The transaction, the Georgia-based company’s third acquisition this year, is also its third “significant investment” in the UK and Ireland following the 2014 purchase of Castlecool and the 2015 acquisition of the Sawyers Group.

Earlier this year, it bought Poland Services Transport – Logistyka, a transport services company in Gdansk, and Cold Land SGPS, a cold storage operator in Portugal.

In addition to its latest acquisition, AGRO Merchants also announced the successful completion of the refinancing of its senior credit facilities and a substantial equity investment from Oaktree. The company did not provide details either on the refinancing – other than to say that it “substantially reduces its cost of capital and provides for a new revolving line of credit” – or on the amount of Oaktree’s investment.

Oaktree, a California-based alternative investment management firm, managed assets worth $99.5 billion as of September 30. It invested roughly $300 million in AGRO when the company was founded in 2013.

Since then, AGRO has been steadily expanding by building new facilities in several locations, including the US, Spain, the Netherlands and Australia, as well as by acquiring companies around the world. It currently operates 63 facilities in 11 countries in Europe, North America, Latin America and Asia Pacific.