Paine & Partners has bought food-safety testing company Global ID Group through its food and agribusiness-focused $893 million Fund IV.
Thought to be the fifth investment made through the fund, closed in January 2015, P&P plan to make opportunistic acquisitions through Global ID in a food-safety industry consolidation play. Purchase details were not disclosed.
“We have seen the increasing focus on food safety at several of our portfolio companies firsthand, which led to our team strategically developing a deep understanding of the food safety and testing sector,” said P&P partner Angelos Dassios.
An increasingly complex food regulatory environment and stronger demand for food traceability from consumers has led investors to see better growth prospects in the food labeling, safety and testing sectors. French firm Ardian invested in disinfection provider Hypred last month through its €4.5 billion Fund V and London-based Silverfleet also expressed an interest in food and animal health and safety businesses.
Private analyst company Research and Markets recently forecast that the international residue-testing market will be worth $4.41 billion by 2021, with 6.4 percent compound annual growth rate from this year. It said increasing outbreaks of chemical contamination in foods, growing allergic reactions, demand for organic food, food safety regulations, and growing international trade were all drivers.
“Given rising consumer awareness, the globalisation of the food chain and the increasing complexity of the regulatory environment, we see strong tail winds that will support Global ID’s growth as an industry leader,” said Dassios.
P&P has made several investments across the food and agribusiness supply chain through its latest fund. It spent about $180 million last year to buy biological pest control producer AgBiTech; has acquired Spearhead International, which supplies PepsiCo and Danone; invested in UK dairy business Meadow Foods and bought specialty vegetable seeds producer and distributor Suba.
The firm has been actively looking at business-to business agriculture and food service companies along the supply chain in recent months, including in Europe. It made a bid for former Silverstreet-owned seed sorting and storage infrastructure provider Cimbria earlier this year, an executive from the London-based firm recently revealed.