November 18 – 2016
And Grobocopatel, seated, with García and Santiago Cotter. Photo: Santiago Filipuzzi A global investment group takes control of Los Grobo, the company led by businessman Gustavo Grobocopatel. This is the first international investment in a local agribusiness company during the Macri Administration.
Los Grobo, with annual revenues of US$ 550 million, 1,8 million tons of grain origination, 50,000 production hectares and US$ 130 million in sales from its agrochemicals division Agrofina, plans to double its size in the next 4 years. Along these lines, yesterday at 4am, at a law firm where at some point during the night they run out of toner given the amount of papers they had to print and copy, they secured a deal with the investment group led by Victoria Capital Partners, which will make a capital injection of US$ 100 million into the company.
Since the capital injection was mostly contributed by the international investment group, it actually gained control of between 70 and 75% of Los Grobo.
Victoria Capital Partners is a private equity group exclusively focused on investing in South America which has US$2 billion in assets under management. About 52% of the capital is from Canada and the USA, 25% from Europe and the remaining portion from the Middle East and Asia. It manages capital for institutional investors such as pension funds, insurance companies, sovereign wealth funds, among others. Argentinean Carlos Garcia is its President. Actually, the firm has 7 partners: three Argentineans, three Brazilians and one Colombian. The group is the successor of DLJ, which, at a certain point in time, invested in Peñaflor, Santillana, Zucamor (cardboard boxes and paper), Satus Ager (off-season seeds), among others.
For this transaction, Victoria Capital Partners appears as the leader of the investment group including the International Finance Corporation (the investment vehicle of the World Bank for the private sector), FMO, the Dutch development bank (that has a focus on agriculture) and UTIMCO, the University of Texas fund, leader in agribusiness investments.
The investment group gained a controlling position of the Company through the US$ 100 million investment, and the undisclosed amount paid for the 22% of Brazilian group Vinci’s stake in Los Grobo as well as for the stake owned by two of Gustavo’s sisters, Andrea and Gabriela. Gustavo and his other sister, Matilde, remain in the company. Gustavo Grobocopatel will continue as President and Horacio Busanello as CEO.
“Victoria gained control of Los Grobo, a majority position”, Grobocopatel told LA NACION. “They are my bosses now”, he added, as a joke. Even though final percentage ownerships are pending an adjustment, the investment group would have an equity interest between 70 and 75% of the company and Gustavo Grobocopatel and his sister Matilde, between 25 and 30%. According to Grobocopatel, even though there’s a change in control, the transaction is not a sale. “What happens is that there is a capital increase, the group grows and there is a change in shareholders as in any other company”, he confirmed.
The businessman, who deemed it “important that investments in the agribusiness sector have already started in the country”, stated that the purpose of “this capitalization is aimed at improving the company’s financial structure in order to be able to complete its growth plan in due course and time”. “If we want to be competitive and sustainable nowadays, we need to have access to know-how and capital. Los Grobo thus incorporates an investors’ network that has, at the same time, wide global contacts, with knowledge and capital”, he added. The company’s model is focused on the sale of inputs, seeds, financial and services, logistics, and precision agriculture (Frontec).
Meanwhile, García, together with senior partner Santiago Cotter, stated that the investment group identified Los Grobo as a “platform” to participate “in a segment where the country has competitive advantages and is capable to be a global leader”. He then emphasized the changes in the country. “We have been talking about the possibility of partnering for some time and the right circumstances were given this year. The changing scenario that Argentina is experiencing made this transaction possible”, he concluded.