Agri-focused US private equity firm Paine & Partners has acquired a majority stake in Australian bio-pest control company AgBiTech through its oversubscribed Fund IV, which closed in July last year after raising $893 million.
AgBiTech’s flagship product uses a naturally occurring virus which affects insects and arthropods. It is sold in Australia, Brazil and the US to target cotton bollworm, a caterpillar that feeds on cotton, soy, corn and other grain plants.
Brazilian cotton and soybean farms faced an outbreak of the bollworm in 2014, and there are fears that a costly outbreak of the grub could soon come to the US.
AgBiTech has begun research on products targeted at pests that pose a more immediate challenge to US growers, including fall armyworm and soybean loope.
There are plans to build a production facility in the US to increase AgBiTech’s presence in the market. Currently, the company operates two manufacturing plants in Queensland, Australia.
“We have enjoyed considerable success in the Australian market,” said AgBiTech chief executive, Anthony Hawes in a statement.
“As [the cotton bollworm] has emerged in other, critically important agricultural regions, we see significant opportunities to bring AgBiTech’s products to these new markets.”
He added Paine & Partners’ success with fellow Australians Costa Group was a factor in AgBiTech’s decision. Paine & Partners took produce company Costa Group public in a $550 million IPO in July this year.
Paine & Partners also holds another biological crop protection company, Verdesian.
Paine & Partners president Kevin Schwartz said that the firm was following a strategy focusing on a sustainable and environmentally safe solutions to meet globally rising demands for food
AgBiTech is the third portfolio company in Paine & Partners’ $893 million Fund IV launched in January 2015. The fund, which was oversubscribed by nearly $100 million, is the largest private equity fund focused solely on food and agribusiness.