ABOUT AGRI-VIE
Agri-Vie is a private equity investment fund focused on food and agribusiness in Sub-Sahara Africa
INVESTMENT FOCUS
As an investor focused on the food and agribusiness value chain, Agri-Vie only in exceptional cases invests directly in stand-alone primary production/farming.
The following sub-sectors relate to our first-order investment focus:
- Food and beverage FMCG
- Convenience foods, including fresh-packed and prepared foods
- Protein products including poultry, aquaculture and beef
- Value-added dairy products, including yoghurts, desserts, cultured milk
- Health & wellness products/nutraceuticals
- Forestry and timber products
- Agricultural inputs including seeds, bio-friendly fertilisers and crop-protection
- Food logistics – cold chain, warehousing, distribution
- Renewable energy
TRANSACTION PARAMETERS
Agri-Vie invests equity and quasi-equity in transactions broadly meeting the following parameters:
- Nature of transactions: Business expansion and consolidation (‘buy-and-build’), corporate unbundling, privatisation, de-listing, MBO’s
- Preferred equity position: 25% – 75%;
- Prudential limit: Agri-Vie normally does not provide more than 75% of the business’s expansion capital required;
- Average transaction amount: ZAR 40m/ USD 6m
- Debt funding can be arranged by Agri-Vie. Agri-Vie is open to syndication and co-investment.
INVESTMENT CRITERIA
Business-related Criteria
We pay particular attention to the extent to which potential investee companies meet the following investment criteria:
- The track record of the business – profitability, cash flow, balance sheet
- Sufficiency of forward cash flows
- Attractive growth prospects
- Competent management who shares in the investment risk
- A sustainable competitive advantage
- Export performance/ potential
- Extent of vertical integration
- Quality of corporate governance
- Attractive entry values and good exit potential
Development Impact-related Criteria
Agri-Vie’s mandate requires that its transactions also meet the following criteria:
- A demonstrably positive impact in general on rural socio-economic development -wealth creation, rural employment, entrepreneurship, diversification of the economic base
- Participation by local entrepreneurs and shareholders in ownership and management
- Utilisation of local resources
- Socially and environmentally sustainable
- Sound corporate governance.
With regards to South African investments, the prevailing codes on black economic empowerment (BEE) apply to each transaction.
INVESTMENT PROCESS
Initial contact leads to a two-page information requirement.
Should an in-principle decision be taken to engage, the Agri-Vie management team will undertake a substantive evaluation process, including a review of:
- Industry and sector status, prospects
- Business model robustness and growth prospects
- Quality and commitment of the management team
- Capital structure and pricing
- Sustainability of development impacts of the investment
- Terms for a shareholders’ agreement.
A mutually acceptable term sheet is followed by in-depth business, financial and legal due diligence. Agri-Vie’s investment committee meets on an ‘as needed’ basis to decide on investment proposals from the investment management team.
The above steps typically involve a period of 12-16 weeks.
INVESTMENT PERIOD
Agri-Vie invests with a view to realising its investment in 7-10 years by way of one of the following mechanisms:
- Strategic (trade) or financial sales
- Transactions with management or other shareholders
- Listing on a main or alternative stock exchange
- Appropriate dividend policies
PARTNERSHIP COMMITMENT
As a long-term equity partner, Agri-Vie commits to the following in addition to the long term capital it provides:
- Board participation by experienced directors
- Business building support in the form of
o business competitive strategy inputs
o strategic marketing inputs
o financial, structuring and general business planning advice
o access to extensive business networks
o general business guidance
o active, hands-on management support to operational interventions when needed
- Staying the course with its investee companies through the inevitable ups and downs of business cycles.
BLACK ECONOMIC EMPOWERMENT
In the broader sub-Saharan context, Agri-Vie supports the involvement of in-country entrepreneurs and shareholders in the ownership and management of its investee companies.
In the context of South Africa, Agri-Vie is committed to the BEE principles and practices as embodied in the prevailing Codes on Broad Based Black Economic Empowerment. Agri-Vie’s own governance and management structures furthermore reflect active participation by previously disadvantaged individuals.
Against the above background, Agri-Vie’s South African transactions reflect:
- Equity participation, where possible, by historically disadvantaged persons
- Participation by historically disadvantaged persons in the management and control of investee companies
- Market access and other benefits to emerging farmers
- A focus on improved participation opportunities for women in food and agribusiness
- Work force skills development and training
- Application of appropriate procurement practices
- Participation in social corporate investment
Source: http://agrivie.com
