Oaktree-backed cold chain platform expands into Poland

Oaktree Capital Management-affiliated Agro Merchants Group (AGRO) has acquired Gdansk, Poland-based cold storage provider Poland Services Transport – Logistyka (PSTL) for an undisclosed price.

PSTL was founded as a transport services company in 2007 and after opening a 58,000 cubic meter frozen warehouse in 2015, it now provides storage and logistics for frozen meat, poultry, seafood, fruit and dairy products. The facility is located near Poland’s Baltic Sea port of Gdansk, which serves as a hub for trade between Europe, the Middle East and Africa.

A source familiar with the PSTL investment told Agri Investor that AGRO had been investigating opportunities in Poland for years and decided to acquire local partners after determining it would be too difficult to build a new facility there. The source added that while the acquisition of PSTL is among AGRO’s smaller initial investments, AGRO plans to expand PSTL’s existing facilities significantly and use the company as a platform for further investment in Poland.

“Poland checks all the right boxes: growing economy, growing consumption, import and export. Basically, half the country is rural and used for agriculture,” the source said, also highlighting low labor costs.  “There is just so much opportunity in that country.”

Oaktree decided to focus on cold chain investments after reports of difficulty securing temperature-controlled storage from some of the firm’s portfolio companies, the source said. The firm found that the sub-sector’s high costs had kept it from receiving as much capital as other links in the global food chain, according to the source.

Oaktree’s initial investment in AGRO, designed to create a platform for global cold chain investments, came in 2013 in the amount of approximately $300 million, according to the source. An Oaktree representative declined to disclose from which fund that investment was made.

The source said that after consolidating its position on the US East Coast through acquisitions in Georgia, Philadelphia and elsewhere, AGRO is now shifting its focus to the US West Coast and Europe. In February, the company acquired a cold storage operator in Portugal soon after having completed the first phase of construction on a facility in the critical hub of Rotterdam, which, according to the source, also helped confirm the company’s interest in Poland.

“All of our customers are saying ‘We want infrastructure in Poland.’ If you think about our model, it is a little bit of a pitch/catch; some of our exports from Rotterdam are going to Poland and vice versa,” the source explained. “If we have infrastructure in both places, there are huge advantages.”

Headquartered in Alpharetta, Georgia, AGRO owns and operates more than 6.3 million cubic meters of temperature-controlled warehouse and distribution space at 60 facilities spread across Europe, North America, Latin America and the Asia Pacific.