Global private equity players such as Brookfield, ADIA and KKR have agreed to seperately invest a total of $500 million (around Rs 4,040 crore) to pick up minority stakes in group companies of Mumbai and London-based agriculture solutions provider UPL Ltd including its Indian subsidiary Advanta Enterprises Ltd.
“A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), Brookfield and TPG to invest Rs 1,580 crore (around $200 million) for 9.09% stake in UPL SAS - India agtech platform at an equity valuation of approximately Rs 17,380 crore ($2.2 billion),” Mumbai-listed UPL said in a regulatory disclosure.
KKR will invest $300 million (around Rs 2,460 crore) for 13.33% stake Advanta Enterprises - global seeds platform’ at an equity valuation of approximately $2.25 billion (around Rs 18,450 crore.
The ADIA arm and TPG will hold 22.2% stake in UPL Cayman, which will be the Global Crop Protection Platform (ex-India), it added.
Meanwhile, both the entities will exit the non-crop protection business of UPL Corp, i.e., the International Seeds business and other global non-crop protection businesses (Decco, Animal Health and Health & Nutrition) for $241 million.
The ‘Corporate Realignment’ exercise is ‘envisaged to complete over the course of next 45-90 days’, subject to customary closing conditions and required approvals.
In 2015, LSE and Mumbai-listed agrochemical major UPL (formerly United Phosphorus Limited) had announced its merger with its group firm Advanta, a supplier of seed and seed technologies. The Shroff family-promoted UPL is present in more than 138 countries, employing more than 13,000 people globally.
Jai Shroff, Group CEO of UPL, said, “Since the acquisition of Advanta in 2006, UPL has built Advanta into a leading global seed company with presence in more than 80 countries. Today, Advanta is a leading player in sustainable agriculture solutions, benefitting the livelihoods of farmers globally. As sustainable farming practices increases in priority around the world, Advanta is well poised for its next leg of robust growth.”
Advanta, established in 1996 through the merger of Royal Vanderhave Group and Zeneca Seeds, is focused on sustainable agriculture, providing farmers with locally adapted high-performing and quality hybrid seeds, developed through decades of research and advanced technologies in traditional plant breeding seeds.
“KKR will make its investment from its Global Impact strategy, which invests in businesses delivering solutions to address critical global challenges, and contributing towards the United Nations Sustainable Development Goals,” the company said in a statement.
Upon completion of the transaction, Advanta will operate as a standalone platform and aim to become a global sustainability leader in seeds. “KKR looks to collaborate closely with Advanta to further expand its business regionally and globally, including through bolt-on acquisitions, and maximize the Company’s growth potential,” the statement added.
“We are pleased to invest in Advanta, a global leader in sustainable agriculture, at a time when food security has grown in importance amidst geopolitical tensions and climate change. Advanta has built a diversified platform with differentiated products and an excellent track record, and we are excited to leverage KKR’s global network, operational and ESG (environmental, social, and governance) management expertise to strengthen its business, implement industry best practices, and achieve its next phase of growth,” said Gaurav Trehan, Partner and CEO of KKR India.
KKR has been actively closing deals in India with the most recent investment of $450 million (around Rs 3,585 crore) in Hero Future Energies (HFE), the renewable energy arm of the Hero Group.
As of 31 December, 2021, KKR has committed over $25 billion in equity globally to climate and environmental sustainability investments.
Presently, Advanta has a presence in 84 countries across Asia, Australia, Europe, United States and Latin America, and Africa. With a diversified portfolio of over 900 hybrids across more than 40 crops, Advanta is a focused player in tropical and subtropical corn, and is a key player in many regions in corn, forages, grain sorghum, sunflower, canola, rice, and vegetables.
Advanta’s business enhances smallholder farmer productivity and income through its agriculture solutions and technology, enabling higher yields and providing benefits including herbicide resistance, and disease tolerance.