eFarm News Argentina: Casanova and Lanusse from Agrifex: “Seed industry is an excellent niche for M&A”
An article written by Javier Preciado Patiño, eFarm News Argentina’s Editor in Chief, and published on September 4, 2018.
Buenos Aires, September 4th. Luis Casanova and Felipe Lanusse are two young professionals who run the local representation of Verdant Partners, an investment consulting group. Luis is an agronomist graduated from Buenos Aires University who worked in Colombia developing lands (acquiring, transforming and selling), and then for MSU -one of the largest farm companies in Argentina- doing the same job. Felipe, a Business Administrator from Catholic University, did its experience working in the Citibank and in a large rice and cattle company in the Corrientes Province.
“It was in 2015 when we thought of joining our expertise to bring investments to new agribusiness projects in the country”, Luis said in a dialogue with www.eFamNewsAr.com. “One of the key points is what the local agribusiness chain offers to the foreign investor and we think that there are very attractive niches in Argentina, for example, the seed industry”, Luis adds.
Luis and Felipe operate under the Agrifex brand, the name of their consulting company. They have the representation for M&A in the agribusiness sector of Verdant Partners LLC, a US company that intervened in the sale of FN Semillas, a local soybean breeding company, to giant Bayer AgroSciences. “The world is seeing great movements in the seed industry, big merger and acquisitions led by ChemChina, Bayer or Dow/DuPont, but in Argentina, there are big opportunities in the market for small and agile companies who are viewing those movements”, Felipe explains.
These professionals distinguish between strategic and financial investors. Despite the uncertainty of the current Argentine economy, they are sure that strategic investors remain interested in the local agribusiness, due to the relevance of the farming economy in the world concert. “You must consider that a big company as John Deere made two acquisitions in Argentina this year, first buying King Agro, an company that produces carbon-fiber accessories to farm machinery, and then buying the largest Argentine sprayer company, PLA”, Luis says.
They are also seeing that financial investors, like venture capital funds, are looking for business opportunities in the farming sector, buying a “mother” company, adding value, buying “complementary” companies in a roll-up strategy, and then, in a 5 to 10 years term, selling it to a strategic investor.
“Biotechnology and genetics are sectors that are attractive to investors. Also, de-commoditized businesses, like the peanut value chain, could bring new investments”, the founders of Agrifex comment.
“We are farm people with financial knowledge, and we represent a company (Verdant Partners) focused exclusively on agribusiness, that has intervened in operations for $2,4 billion worth”, Luis and Felipe say. They clear up that their representation is for South America, excluding Brazil, for merger and acquisitions in the crop production business.
Finally, they think that the farmland market offers great opportunities to investors, but the existence of a law restricting the acquisition by foreign persons and companies still lock new business operations.