Paine Schwartz Partners-owned food safety and quality company Global ID has bought Bioagricert, an Italian company specializing in organic certification.
Based in Bologna, Italy, Bioagricert was founded in 1984 and provides organic and food safety certification to national Italian and international standards for 11,500 domestic operators. The company also offers certifications for natural cosmetics, green energy and other products, but is predominately focused on food and agriculture and offers certifications for organic production in the US, Brazil, Japan and elsewhere.
The company’s 1,500 international customers are spread between Latin America, Southeast Asia, Eastern Europe and the Mediterranean region. Bioagricert also offers Global Good Agricultural Practice (GlobalG.A.P.) and EU-protected geographic designation certifications, among others.
Transaction value was not disclosed and Paine Schwartz declined to provide more detail.
Global ID chief executive Brad Riemenapp said that the acquisition was part of the company’s efforts to establish a leading position within the food testing, inspection, certification and supply-chain services market.
“Importantly, Bioagricert adds organic certification to our global suite of products and services, which will allow Global ID to offer a broader suite of solutions to our clients,” said Riemenapp, who replaced founder Ken Ross in September. “We believe there are significant opportunities to drive growth through our complementary service offerings on a global basis, most notably non-GMO certification, GlobalG.A.P. and our ProTerra sustainability program.”
“Certification is a big area of need for organic”
Kellee James, Mercaris
Paine Schwartz acquired Global ID last October, using capital from its Paine Schwartz Food Chain Fund IV, which surpassed an initial target of $800 million before closing on $893 million in early 2015. In August, Fairfield, Iowa-headquartered Global ID paid an undisclosed sum to acquire Analitus Analises Biotechnological, a Brazilian food safety lab. The acquisition was presented as the start of Paine Schwartz’s efforts to create a global food safety platform.
Global ID’s steps towards expansion come amid a series of other food safety-related deals and expressions of investor interest in the sub-sector over the past year.
Last December, Warburg Pincus portfolio company Hygenia acquired DuPont’s food safety diagnostics business for an undisclosed sum. Diversis Capital purchased Arrowstream, a software-as-a-service company focused on demand, which is expected to surge with the implementation of the Food Safety Modernization Act in February. This summer, mid-market private equity firm Levine Leichtman Capital Partners acquired FlexXray, which uses x-ray imagery to help clients identify food safety incidents.
In addition, ImpactVision, a company offering a similar service based on imaging technology initially designed for use in space, won the people’s choice award at Rabobank’s FoodBytes competition in New York, where audience members were asked to rank companies based on five-minute presentations.
Appetite for certainty
Kellee James, founder and chief executive of Mercaris, which offers market data and trading services for organic and non-GMO crops and commodities, told Agri Investor that Global ID’s acquisition of Bioagricert reflects growing interest in service businesses related to agriculture. James highlighted the acquisition of Central Illinois Grain Inspection by SGS, a Swiss inspection, verification, testing and certification company, in July as reflecting that company’s growing interest in agriculture.
While organic certification in the US is carried out largely by membership-driven non-governmental organizations that have received USDA approval, James said, the recent increase in organic demand has led some of the larger certifiers to consider consolidation in order to increase efficiency and grow with market demand.
“Certification is a big area of need for organic and in general people are looking for assurances about where their food comes from and that’s where certifiers come in,” she said. “Certifications, inspections and information-as-a-service is something there is demand for.”