Proterra Investment Partners to Make Brazilian Soybean and Corn Farmland Move by Mid 2016
Proterra Investment Partners, the private equity unit spun off from Cargill’s Black River Asset Management in September of last year, has a $450 million war chest earmarked for farmland and related infrastructure purchases in Brazil, and across Latin America, as well as Australia, according to Bloomberg.
Brent Bechtle, head of agriculture funds at Proterra, told Bloomberg that the firm is seeking out farmland for soybean and corn production in Brazil’s northern frontier regions including the state of Para, and that the firm is expecting to invest within the next three to six months.
Currency shifts have created a rather positive economic landscape in regard to Brazilian acquisitions for Proterra, as the dollar has gained 41% on the Brazilian real over the past year amid that country’s ongoing recession – not only giving Proterra buying power, but making distressed Brazilian companies eager to sell. Under such fortuitous conditions, the firm announced it first agricultural acquisition in the country in December 2015 when it bought two sugar cane mills with a combined crushing capacity of 3.7 million tons and 86,000 acres of farmland from Antonio Ruette Agroindustrial Ltd. in a deal valued at $175 million.
Although Cargill remains an investor in Proterra, it will not be actively involved in the management of the sugar mills, however the milling operation will likely have a relationship with the sugar trading joint venture between Cargill and Copersucar SA, Alvean.
Proterra is also considering potential farmland and infrastructure acquisitions in Colombia and Mexico as well as Australia, however, about half of the firm’s $450 million that is set aside to fund the purchases will go to investments in Latin America according to Bechtle.