Paine Schwartz-backed company acquires Brazilian food safety lab

Analitus will compliment Global ID’s existing presence in the South American nation, where food safety has become a prominent national issue.

In its first acquisition since coming into the Paine Schwartz Partners portfolio last year, food safety platform Global ID has purchased Analitus Analises Biotechnological, a Brazilian food safety lab. Financial terms were not disclosed.

Located in the southern city of Caxias do Sul, Analitus offers testing for allergens, GMOs, pesticides, mytoxicins, residues and contaminants, among others. It was spun out from EcoCerta in 2013 and also has technology and research and development capabilities that were included in Global ID’s acquisition.

Global ID chief executive Ken Ross said in a statement that the deal came after his company, which has operated in Brazil since 2000, worked together with Analitus for more than five years.

“Brazil is an agricultural powerhouse, but it’s just starting to move forward towards a more sophisticated approach to food safety and we hope to be a part of that,” Ross told Agri Investor.

Global ID provides food safety and quality testing, inspection, certification and consulting to more than 15,000 customers in more than 100 countries. Headquartered in Fairfield, Iowa with offices in the UK and Brazil, the company has distinct units devoted to testing services, food safety and quality certifications and regulatory compliance.

Paine used capital from its Fund IV, which closed on $893 million in late 2015, to purchase Global ID in October. At the time, Paine Schwartz partner Angelos Dassios said that the firm’s portfolio companies had alerted Paine to a growing focus on food safety and that it planned to grow Global ID both organically and through acquisitions.

In acquiring Analitus, Global ID is expanding its presence in a country with a population of 207 million where food safety concerns have recently migrated to the top of the national agenda. In March, the conclusion of a two-year investigation found that more than 20 Brazilian slaughterhouses had bribed officials to avoid food safety regulations. The revelation, dubbed the “Carne Fraca” scandal (“Weak Meat” in Portuguese), prompted at least 35 nations to restrict meat imports from Brazil and weakened the political position of President Michel Temer.

In a May Agri Investor commentary, Monica Ganley, founder of agri-focused advisory firm Quarterra, wrote that that the scandal should remind investors of both the perils of corruption in developing countries and the potential of Brazil’s food safety market.

“Given the failure of current food safety systems, new technologies that can address these weaknesses are likely to find themselves with an important market to serve,” Ganley wrote. “Opportunities abound and the investor ready to embrace them will surely be well rewarded.”