November 18 – 2016
by MANUEL PARERA
Grupo Los Grobo, controlling company of Los Grobo Agropecuaria, informed in a press release that it has entered into an agreement with the fund VSAP Agriservices L.P., for a possible share subscription of the agribusiness holding controlled by the “soybean king”. This confirms the intention expressed by Gustavo Grobocopatel, who had already mentioned that he was looking for a new investor who could contribute cash to capitalize its businesses and develop investment opportunities in one of the main agribusiness companies in the country.
Even though the Company preferred not to comment (apart from the press release that it sent to the Comisión Nacional de Valores-CNV), and they did not disclose the amount that will be invested, it is estimated that it would be around US$ 100 million. The Company currently has US$ 700 million in revenues and plans to grow to US$ 1400 million with the addition of new businesses and the current scenario under the new government. “These political changes make us reset as businessmen, change our behavior. We used to think that we had to resist. Now we have to endeavor, create opportunities”, Grobocopatel assured during a business conference in Pilar a few months ago. He also stated that he was going to focus on research and development, “in chemical areas as well as in precision agriculture, in seeds and services”. He recently estimated that the yearly grain production in the country will grow 14% in 2016, up to 120 million tons, while in the next two to three years production might reach 150 million tons, and up to 200 million in 10 years.
The new partner will contribute not only capital but also expertise. Victoria Capital Partners (VCP), an investment firm managed by the same group that was responsible for DLJ South American Partners, private equity firm that controlled the Grupo Peñaflor in Argentina (until they sold their interest to the Bemberg Family, former owners of Quilmes, in December 2010).
Its Managing Partner is Carlos García, a private equity businessman: he is a member of the board of directors of the Latin American Private Equity and Venture Capital Association and is Vice President of the Argentine Venture Capital and Private Equity Association. Through DLJ, he is a member of the Board of Directors of several companies: Zucamor; Papel Misionero; Grupo Santillana de Ediciones and Corona Industrial, among others. Likewise, he was director of the American Chamber of Commerce; Arcos Dorados; Jugos del Valle; Grupo Peñaflor, Localiza Rent-a- Car; Cameo Marinetti, among other companies. Focused on private equity investment in South America, VCP manages two private equity funds (DLJ South American Partners I -“SAP I”- and Victoria South American Partners II -“SAP II”-). It also manages several co-investment funds with a capital contribution of a total of US$ 1,500 million. The fund also participates in different businesses in Brazil; Colombia; Perú; Chile and Argentina.
On the other hand, Grupo Los Grobo has a business platform divided in five large segments: crops protection (through Agrofina, where they invested more than $ 400 million); agricultural production; supplies and services sale; grain origination (with a grain storage capacity of 290,000 tons) and mills and pasta manufacturing. The company recently launched Frontec, an online business platform for agricultural producers for real time analysis and tracking.
