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Fertiliser maker raises $110m in hybrid offer

To build its first large-scale biosolids-to-fertliser facility, VitAg issued tax-exempt bonds and equity to a range of institutional, private equity and strategic investors including a TPG affiliate.

VitAg Corporation, a speciality fertiliser company, has raised $110 million in a debt and equity offering to finance the construction of a biosolids-to- fertiliser facility in Florida. This will be the firm’s first full-scale project since its creation in 2008.

Biosolids are the result of treatment from domestic sewage and can be recycled and converted into fertilisers.

The firm issued $64 million of 22-year, tax-exempt bonds through the Orange County Industrial Finance Authority. Citigroup Global Markets underwrote the bonds. They are tax exempt due to the company’s involvement in the handling of solid waste.

Around 10 local institutional investors bought these bonds after the firm went on a roadshow in June. The yield on the bonds is 8.5 percent, a source close to the deal told Agri Investor.

TPG Alternative and Renewable Technologies (ART), an arm of global private equity firm TPG, invested the most in the equity round and is now the largest shareholder in the company. Further details about ART’s investment were not disclosed.

Other equity investors included Agro-Iron, the iron micronutrients producer; Shrieve Chemical, an industrial chemicals supplier; some Florida-based agricultural companies and individual investors, according to a statement.

The quality of the investors is “a strong signal of support”, Jeffrey Burnham, VitAg’s president and chief executive, said in the statement.

“TPG ART is a leading global renewable technologies investor, and our strategic investors intimately understand the fertilizer market and have strong contacts within the industry. This is an exciting time for VitAg,” he added.

Further details about the equity round were not disclosed and TPG did not respond to requests for comment.

The new facility will be built a few miles Northwest of Orlando, Florida and is expected to produce “slow release organically-enhanced premium fertiliser” through VitAg’s proprietary process, according to the statement.

CDM Constructors will build the facility and AJ Sackett, an engineering company, will design it. VitAg has entered into a marketing agreement with Trammo, a global fertiliser merchandising and trading company, over several years.