Biobest acquires Biotrop, a biologics company in Brazil

 Biobest has signed an agreement to acquire Biotrop. The agreement was signed between Biobest and Aqua Capital, GIC and Biotrop management. 

Biotrop is a leading company in Brazil's booming biologics market and the company is in a phase of rapid growth, with a projected turnover of R $679 million (EUR 128 million) in 2023. Biotrop is controlled by Aqua Capital, a SAO Paulo-based private equity firm that focuses on investments in the agricultural sector.

Based on a fully diluted enterprise value of R $2.8 billion (EUR 532 million), Biobest will acquire 85% of its shares. The remaining 15% will be acquired by Biobest after a three-year transition period. The deal is expected to close by the end of the year. Biobest's acquisition strategy aims to promote natural solutions for integrated pest control. This transaction significantly enhances Biobest's position in the South American market and begins its transformation from a horticultural biocontrol and pollination company to a major agricultural biologics company, covering biocontrol, inoculants, biostimulants, and indoor/outdoor crop pollination.

Jean-Marc Vandoorne, CEO of Biobest, said: "This is an important transaction in Biobest's history. The Brazilian market for biopesticides and other biologics is estimated to exceed $1 billion. Driven by a supportive regulatory environment for biological products, the market in Brazil is growing at an annual rate of 43%, outpacing growth in other major markets. Biotrop has a leading position in this market. Its advantages lie in a large number of research and development, high quality, high productivity and strong multi-channel sales support the company's registered patented products. We are excited that Biotrop's top-notch management team will continue to lead the company and be part of our global team." There are many layers of synergies. More importantly, this transaction expands our business from horticulture to agriculture (including major field crops) and from biocontrol to biologics such as inoculants and biostimulants. While focusing on biologics, we still have the potential to become an agricultural giant in plant protection and nutrition. In the context of the urgent need to transition to more sustainable agriculture and reduce the use of chemical pesticides and their risks, this is an area that Biobest shareholders are eager to invest in.

 Antonio Zem, CEO of Biotrop, commented: "Our company is growing by leaps and bounds. To take advantage of global growth, now is a great time to join an international business. We have received strong interest from several major international agribusinesses. We chose Biobest because of its strategy and agility focused on biologics, and its track record of successfully integrating businesses and building on the initiative of local management teams.

 As a member of Biobest, we are confident that our management can continue to implement the plan with the support of international enterprises. Together, Biobest and Biotrop will advance initiatives that can have a positive impact: our portfolio of plant protection products provides a reliable alternative to chemical pesticides, and our biologics reduce CO2 emissions and restore soil health, contributing to climate change mitigation. By providing farmers with the biological solutions and technical advice they need, shared commercial success builds loyalty and contributes to increased food security and more resilient and sustainable agriculture."

In connection with the transaction, Morgan Stanley International Inc. acted as financial advisor to Biobest on the M&A, Berenberg Bank acted as equity financing advisor, Stocche Forbes/Jones Day acted as legal advisor, EY acted as financial and tax advisor, and McKinsey & Company acted as strategic advisor. On Aqua Capital's side, Brazilian bank Itau BBA acted as its M&A adviser and Demarest acted as its legal adviser.