Target Company Overview

Nazca Capital, through its Nazca III Fund, has acquired a stake in Agromillora, a global leader in the multiplication of stone fruit, olive, and vine plants, via a capital increase. Established in 1986 by the Sumarroca family, Joan Samsó, and Joan Torrens, Agromillora specializes in advanced plant multiplication services for the agricultural industry. In 2012, the company achieved sales of €28 million and experienced an annual growth rate of 15% over the past two years, driven by its international expansion.

Headquartered in Subirats, Barcelona, Agromillora operates in ten countries: Spain, the United States, Chile, Tunisia, Turkey, Morocco, Argentina, Brazil, Australia, and Jordan, supported by five multiplication laboratories located in Spain, the United States, Turkey, Brazil, and Chile, employing a total of 500 staff. The company is strongly committed to research and development, focusing on in-vitro multiplication processes of woody species and adapting new types of plants to super-intensive cultivation techniques. In 2012, Agromillora supplied 30 million plants across 12 countries, with over 60% of its sales derived from international markets.

Industry Overview

The agricultural sector in Spain, particularly in plant multiplication, plays a crucial role in supporting the modernization and productivity improvements within the farming community. The demand for high-quality planting materials has surged as growers seek to optimize their yields and reduce costs, aligning with the global trend towards sustainable agriculture practices. The introduction of super-intensive cultivation methodologies allows for mechanized harvesting and enhanced quality control measures, directly benefiting farmers through higher returns.

Spain is strategically positioned within the Mediterranean region, serving as a primary exporter of agricultural products. Consequently, the industry is witnessing a gradual shift towards innovative breeding techniques and advanced propagation methods aimed at meeting the burgeoning global food demands. As competitive pressures rise, companies like Agromillora are well-placed to leverage their technical expertise and innovative practices to capture a larger share of the international market.

The growth prospects for Spain's agricultural sector remain robust, particularly as the Mediterranean countries continue to focus on improving their agricultural output. A significant contributor to this growth is the adoption of new agricultural technologies and practices, which are critical in addressing climate change impacts and ensuring food security. As leaders in this transition, companies with strong R&D capabilities, such as Agromillora, are set to play an essential role in shaping the future of agriculture.

Rationale Behind the Deal

The investment by Nazca Capital in Agromillora represents a strategic move to facilitate the company’s ambitious growth objectives, particularly within international markets across America and the Mediterranean region, including the Middle East. By leveraging Nazca's extensive international experience, the Sumarroca family and Agromillora founders aim to solidify their market presence and capitalize on emerging opportunities.

Moreover, Agromillora’s plans to commercialize new varieties and products, backed by years of research, promise substantial efficiency and health improvements in the production of citrus fruits, nuts, and berries, among others. This investment aligns perfectly with the growing global demand for agricultural innovation and quality products.

Investor Information

Nazca Capital is a leading private equity firm known for its focus on investing in Spanish mid-market companies with significant growth potential. With a strong track record in sector-specific investments, Nazca Capital brings not only capital but also valuable strategic support to its portfolio companies. Their partnership approach enables firms like Agromillora to unlock new market opportunities and accelerate growth trajectories.

As a well-regarded investment entity, Nazca aims to leverage its experience and industry insights to help Agromillora expand its operational reach and enhance competitiveness in the global market. The partnership is expected to empower Agromillora to realize its operational ambitions and support its strategic initiatives in innovative plant propagation techniques.

View of Dealert

Dealert views the investment by Nazca Capital in Agromillora as a promising opportunity, considering the latter's strong market position as a plant multiplication leader and its commitment to R&D. With a projected increase in sales to €65 million by 2016 and an emphasis on international activity, Agromillora demonstrates robust growth potential that aligns well with Nazca's investment philosophy.

The agricultural sector's shift towards super-intensive cultivation methods positions Agromillora to significantly enhance its productivity and profitability. By integrating innovative practices and focusing on quality production, the company can capitalize on increasing global demands for high-performance agricultural products.

Moreover, the strength of Nazca's support could profoundly impact Agromillora’s expansion strategy, especially as it seeks to penetrate new markets and introduce novel plant varieties. The future of Agromillora looks bright, and clients and stakeholders can expect positive developments that can drive sustainable profitability in the coming years.

View Original Article