Target Information

SICIT Group S.p.A. ("SICIT" or "the Company"), founded in 1960 and based in Chiampo, Vicenza, stands as a global leader in the biostimulants industry. The Company specializes in converting leather industry waste into high-value products for sustainable agriculture. Operating under a fully circular business model, SICIT focuses on producing biostimulants that enhance nutrient efficiency and crop resilience, alongside plaster retardants and biofuel fats. With over 90% of its revenue generated from international markets, SICIT caters to leading agrochemical companies and maintains a strong emphasis on research and development, innovation, and quality control.

Since Renaissance Partners acquired a significant stake in SICIT in 2021, the Company has experienced remarkable growth, doubling both revenues and EBITDA. The anticipated joint acquisition by Renaissance Partners and TPG Rise Climate will further accelerate SICIT’s growth trajectory, as strategic investments continue to enhance production capabilities, particularly with the planned launch of a new production facility in Mexico.

Industry Overview

The sustainable agriculture industry, particularly in Italy, has witnessed significant growth in recent years, spurred by increasing demand for environmentally friendly farming solutions. The shift towards sustainable practices reflects a global trend, driven by both regulatory pressures and consumer preferences for organic and sustainably sourced products. Italy's agricultural sector has been responding to these trends by adopting innovative technologies and practices aimed at reducing environmental impact and improving productivity.

As European policymakers emphasize sustainability, funding and incentives for green technologies in agriculture have surged, making it an opportune time for companies like SICIT to thrive. This increasing financial backing encourages research and development in biostimulant solutions that can replenish soil health, enhance crop resilience, and ultimately ensure food security amid climate challenges. SICIT, by addressing these needs, positions itself uniquely within this dynamic landscape.

The leather industry, one of SICIT's primary material sources, is also adapting to sustainability demands, seeking ways to minimize waste and boost efficiency. SICIT's innovative approach to utilizing leather industry residues not only meets this need but also supports broader agricultural sustainability efforts, showcasing the potential for circular economy initiatives in conventional industries.

Furthermore, as climate change leads to more extreme weather events threatening arable land and crop yields, the significance of biostimulants that improve nutrient use and crop durability has never been more critical. The alignment of SICIT's offerings with these emerging market needs reflects a promising future for the Company and the broader sustainable agriculture sector.

Rationale Behind the Deal

The strategic rationale for the joint acquisition of SICIT by Renaissance Partners and TPG Rise Climate lies in their shared commitment to advancing sustainable agricultural practices. The investment will not only fuel SICIT's planned expansion but also respond to the rising global demand for sustainable agricultural solutions. The collaboration seeks to leverage TPG's expertise in climate-related investments and Renaissance Partners' strong industrial background, creating a powerful alliance aimed at further strengthening SICIT's market position.

Through this partnership, SICIT aims to enhance its production capacity, diversify its product offerings, and expand its geographical reach. The upcoming launch of a new production facility in Mexico, as well as the introduction of innovative plant-based products, highlights SICIT's proactive approach to capitalize on growth opportunities in the rapidly evolving agricultural landscape.

Information About the Investor

TPG Rise Climate is the dedicated climate investing arm of TPG, a globally recognized alternative asset management firm. With a focus on building and scaling impactful climate solutions, TPG Rise Climate employs its vast resources and diverse expertise to identify and invest in promising ventures across various sectors related to climate adaptation and resilience. With a strong financial backing of $28 billion aimed at global impact investing, TPG Rise Climate is ideally positioned to support SICIT's growth through strategic investments.

Renaissance Partners, on the other hand, is an investment firm focused on family-owned mid-market companies primarily based in Italy. With a strong portfolio centered around sustainability, healthcare, and technology, Renaissance Partners has successfully guided SICIT through a significant growth phase since its initial investment in 2021. Their continuous support and industrial know-how will be critical in facilitating SICIT’s expansion and enhancing its competitive edge in the market.

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The recent joint acquisition of SICIT by Renaissance Partners and TPG Rise Climate can be viewed as a compelling investment opportunity, given SICIT's proven track record of growth and its relevance in an essential market segment. The Company's strategic pivot towards sustainability aligns with broader market trends favoring environmentally responsible solutions, making SICIT well-positioned for long-term success.

Moreover, the partnership's emphasis on expanding SICIT’s production capacity and geographic footprint through the development of new facilities and product lines serves as a crucial growth driver. This approach not only enhances SICIT's service offerings but also mitigates risk by diversifying its business model, thereby increasing resilience against market fluctuations.

Additionally, as the demand for sustainable agricultural practices intensifies globally, SICIT's biostimulants will likely see an upsurge in demand, further enhancing potential returns for investors. The increasing need for solutions that combat climate change effects presents significant opportunities for SICIT to innovate continuously, bolstering its market position and driving profitability.

In conclusion, the collaboration between Renaissance Partners and TPG Rise Climate holds great potential for SICIT's future. The unique strengths of both investors can catalyze SICIT's endeavors in sustainable agriculture and position the Company for substantial growth in an increasingly eco-conscious market. Thus, this deal stands as a promising investment, indicative of a positive trajectory paving the way for SICIT to strengthen its leadership in the industry while promoting sustainability.

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