ADM Capital Europe LLP is pleased to announce that its Cibus Fund (“Cibus”) has acquired a 99% stake in Olivos Naturales (“Innoliva”), one of Europe’s largest Extra Virgin Olive Oil producers.
Spain produces approximately 50% of the world’s olive oil, and Innoliva is one of the largest Spanish producers.
Innoliva was founded in Spain in 2006 and is one of the pioneers of Super High-Density olive production. Innoliva’s 5,000 hectares of olive groves in Spain and Portugal produce up to 9,000 tonnes of Extra Virgin Olive Oil annually and in recent years more than 98% of the Company’s Extra Virgin Olive Oil has achieved acidity levels of 0.2% or less. The official designation of Extra Virgin Olive Oil is for acidity below 0.8% and there is clear correlation between high value and low acidity levels rendering the Innoliva production both high yielding and high value. This outstanding achievement has been made possible by the Company’s investment in innovation, which has delivered a proprietary and industry-leading production process from planting through harvesting and storing.
The Cibus Fund aims to take advantage of the significant investment opportunities arising from global demographic changes, adoption of improved diets and the inability of many of the world’s fastest growing economies to meet increasing regional demand for certain high-value foods. Our investment thesis is that many of the largest markets for high value food lack domestic or regional know-how and/or the natural resources to satisfy growing demand. As such they are reliant on food imports, or reliant on importing technologies and processes which enable efficient production. The Innoliva acquisition mirrors this thesis clearly as the situation in the world’s third largest consumer of Extra Virgin Olive Oil, the USA, demonstrates. The US imports more than 95% of the olive oil it consumes and is currently unable to satisfy burgeoning domestic demand from those who appreciate the health benefits of the “Mediterranean Diet”. The Cibus Fund is focused on identifying opportunities to create value from these mismatches.
The transaction is the second made by ADM Capital’s Cibus Fund, which completed a USD$100m first close in May 2017.
Rob Appleby, Partner, Joint Chief Investment Officer, ADM Capital Europe LLP said: “I am delighted to announce the Cibus Fund’s acquisition of Innoliva. This is the Cibus Fund’s first buyout, and it represents the essence of what the fund seeks to achieve: investments in highly profitable mid-market food producers and processors, which are leaders in their field, have a demonstrable competitive advantage, and are positioned to capitalise on important global changes in diets and consumption patterns.”
Commenting Gavin Sasson, Partner, Senior Investment Director, ADM Capital Europe LLP said: “Innoliva’s production costs are among the lowest in the industry, an achievement made possible by the Company’s innovative and pioneering use of production and processing technology. These attributes are at the core of the Cibus Fund’s investment remit. The many months that we have spent structuring this transaction have given us the opportunity to get to know the Company’s excellent management team and to work with them in developing an exciting business plan which involves adding further production and processing capacity, and using new channels of distribution to take the company directly into new markets. We hope to build on the solid and successful foundations established by the outgoing shareholders, who ten years ago had the vision, courage and energy to establish what is now a global leader in its field”.
Commenting Alastair Cooper, Partner, Head of Early Stage, ADM Capital Europe LLP said: “As one of the UK’s largest organic farmers, I was delighted to see that Innoliva’s organic olive groves are among the most productive of the company’s 5,000 hectares. The advanced water-saving and fertigation technology employed in the production process validates our view that, when implemented in a sophisticated and ecologically-sensitive way, organic techniques can result in higher yields. I am excited to be working with the Company’s excellent management team and look forward to exploring other ways of producing more food with fewer inputs”
ADM Capital Europe was advised by Pérez-Llorca
One of the selling shareholders was advised by Uría Menéndez and Arcano
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Nick Woods/Giles Stewart/Ambrose Fullalove
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About ADM Capital
ADM Capital Europe LLP is a London-based private equity and investment advisory firm. Founded in 1998, ADM Capital manages or advises approximately US$1.3bn as at 30th August 2017, investing in 15 countries. With over 50 people operating out of 7 offices, ADM Capital manages or advises closed-end, open-ended and managed accounts. With its long track record, and expertise in Europe and Asia, ADM Capital focuses on private transactions accessed via its extensive, proprietary network. Its proven investment strategy delivers stable and consistent returns through careful selection, investment rigour and partnership.
About the Cibus Fund
The Cibus Fund focuses on both mid-market investment opportunities and disruptive technologies in sustainable food-chain companies, primarily across Europe and Australasia and is targeting a US$500m final close in 2018. The Cibus Fund aims to take advantage of the significant investment opportunities presented by global demographic changes, shifting trade patterns and the inability of the world’s fastest growing economies to meet rapidly increasing regional demand for high-value foods. The Cibus Fund will target companies with strong management teams that are active in one or more stages of high-value food chains and will look for companies that are established category champions with a demonstrable technological advantage. Investments are evaluated on their environmental sustainability as a key determinant of value creation.