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PSP invests in livestock monitoring technology company

PSP is investing alongside BC Partners and Electra Partners with a view to consolidating Allflex's global position, as demand for animal health monitoring systems grows.

Canada’s Public Sector Pension Investment Board, known as PSP Investments, has bought a significant minority interest in Allflex, a global livestock monitoring technology company in which private equity firm BC Partners continues to hold a controlling interest.

No financial details were disclosed.

Electra Partners, the £2 billion ($2.83 billion; €2.51 billion) London-based firm which sold 100 percent of its controlling stake to BC Partners for $1.3 billion three years ago, is also a minority shareholder alongside PSP, after re-investing in the company.

BC Partners bought the company from Electra Partners for $1.3 billion in 2013. BC Partners managing partner Ewald Walgenbach said at the time that the company’s market-leading position gave it strong “defensive characteristics” on which the firm planned to build.

The investment marks part of PSP Investments’ increasing presence in the European private equity market, said the LP’s senior vice-president and global head of private investments Guthrie Stewart in a statement.

It is also the latest addition in PSP’s agricultural investment portfolio. PSP has a direct investment in Acelity, a healthcare provider for animals and humans. It also purchased rural land in Australia through a joint venture with Hewitt Cattle Company, spokesman Mark Boutet told Agri Investor in 2015, and has a direct investment in New Zealand’s Kaingaroa Timberlands, alongside NZ$30 billion ($20.2 billion; €18.81 billion) sovereign wealth fund NZ Super.

“We welcome PSP Investments, a sophisticated investor with a long-term vision and experience in livestock investments,” said Jacques Martin, Allflex chief executive officer.

Since 2013 BC Partners has backed Allfex’s acquisition of international cow monitoring technology provider SCR in a transaction valued at $250 million, expanded geographically and taken on an additional 500 staff. The investment reflected a continuing growing demand for dairy cattle monitoring systems. Consolidation at production level, and as a result, the ubiquity of larger herds needing remote monitoring technology, has increased in the dairy industry. The trend is expected to continue in countries like Australia, India, Russia and possibly China, Australian consultancy RMCG senior consultant and dairy expert Daryl Poole commented to Agri Investor.

“Demand for animal intelligence products and solutions is increasing worldwide and we are confident that Allflex is ideally positioned to continue to lead the space and expand into new markets,” said BC Partners. managing partner Jean-Baptiste Wautier.

“We look forward to working with BC Partners and supporting Allflex’s seasoned management team as it enhances its global leadership in animal intelligence,” said Stewart.

Electra first invested in Allflex in 1998, and sold its stake to BC Partners in 2013, generating a 15 times return on Electra’s original investment, according to Electra. On Allflex’s purchase of SCR, the firm then reinvested for a 15 percent minority stake in Allflex, valued by the firm at £54 million in September 2014.

BC Partners investments include floricultural breeding company Dummen Orange and US pet supply retailer PetSmart. Previous investments include life sciences company Aviagen and Synlab, which has animal and human health divisions. The firm is currently investing its ninth fund, which was raised in 2011 with total commitments of €6.7 billion. As of September last year, PSP Investments had $112 billion in net assets under management.