PE investors commit $500m to India agribusiness giant UPL

UPL operates across the agricultural value chain, from seeds to crop protection and biologic products to post-harvest crop storage solutions to soil and water technologies. It has more than 13,000 in over 130 countries and annual revenue exceeds USD 6bn. The company assumed its current scale with the USD 4.2bn acquisition of Arysta LifeScience in 2019.

External investors are being brought in to support a realignment of operations into three pure-play platforms. Jai Shroff, the company's global CEO, said this would ensure better allocation and utilisation of resources, while enabling "fair value recognition" and enhancing the growth potential of the individual platforms, according to a filing.

KKR is paying USD 300m for a 13.33% stake in Advantage Enterprises, a newly formed subsidiary comprising UPL's seeds business. The company, valued at USD 2.25bn, offers over 900 hybrids across 40 crops and has a presence in 84 countries. It is a global leader in tropical and subtropical corn, and has regional leadership positions in forages, grain sorghum, sunflower, canola, rice, and vegetables.

KKR is investing under its global impact strategy, having noted the structural challenges facing food production globally and the role Advanta plays in improving yields and productivity, as well as supporting incomes, for smallholder farmers. According to a statement, it will work with the company on expansion through bolt-on acquisitions and on best practices in terms of environment, social, and governance (ESG).

The rest of UPL's operations will be divided into India and non-India divisions. UPL SAS, described as India's largest agtech platform, will include domestic crop protection products, SWAL Corporation, which produces pesticides and fertiliser, Adarsh Farm Services, a farmer advisory business, and digital distribution platform Nurture, which serves a network of over 100,000 retailers and 2.4m farmers.

TPG, Brookfield, and ADIA have agreed to invest USD 200m for a 9.09% stake in UPL SAS, giving the business an equity valuation of USD 2.2bn, the filing said. Brookfield is investing from its Global Transition Fund, which makes investments that accelerate the transition to a net-zero carbon economy.

The remaining non-India assets comprise UPL's global crop protection products business. TPG and ADIA will take a combined 22.2% interest in that as part of a restructuring that will see them exit their existing positions in UPL's non-crop protection business – which includes international seeds, animal health, and plant health and nutrition – for USD 241m.

In 2019, TPG and ADIA each committed USD 600m to support UPL's acquisition of Arysta. They took a 22% interest in UPL Corporation (UPLC), the entity that assumed ownership of Arysta's global portfolio, which primarily comprised crop protection and plant nutrition products.

UPL reported revenue of INR 462.4bn for the 12 months ended March 2022, up from INR 386.9bn the previous year. EBITDA and net profit came in at INR 101.6bn and INR 46.3bn, respectively, year-on-year increases of 19% and 25%. Latin America is the biggest market by revenue, contributing INR 180.4bn. India is fourth-largest, after North America and Europe, with INR 56.8bn.

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• Topics
• South Asia
• Expansion
• Industrials
• Agriculture
• Agritech
• India
• KKR
• TPG Capital
• Brookfield Asset Management
• Abu Dhabi Investment Authority (ADIA)