| INVESTMENT APPROACH |
| INVESTMENT FOCUS
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We are a mid-market investor in businesses involved in inputs to,
processing, marketing and distribution of food and beverage, fibre, timber and
aquaculture products.
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 investment focus:
- Food and beverage FMCG
- Convenience foods, including fresh packed and prepared foods
- Protein products including from 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
- In the context of integrated rural development, Agri-Vie’s mandate includes investments in ecotourism.
| INVESTMENT FOCUS – Transaction parameters |
Agri-Vie invests equity and quasi-equity in transactions broadly meeting the following parameters:
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Nature of transactions: Business expansion and consolidation (‘buy-and-build’), corporate unbundling, privatisation, MBO’s in combination with one of the above transaction types;
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Preferred equity position: 25% - 75%;
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Prudential limit: Agri-Vie normally does not provide more than 75% of the business’s expansion capital required;
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Average transaction amount ZAR 40m/ USD 6m
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Debt funding can be arranged by Agri-Vie.
Agri-Vie is open to syndication and co-investment.
| INVESTMENT FOCUS – Investment Criteria |
Business-related criteria
We pay particular attention to the extent to which potential investee companies meet the following investment criteria:
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The track record of the business: profitability, cash flow, balance sheet;
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Sufficiency of forward cash flows;
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Attractive growth prospects;
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Competent management who shares in the investment risk;
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A sustainable competitive advantage;
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Export performance/ potential;
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Extent of vertical integration;
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Quality of corporate governance;
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Attractive entry values and good exit potential.
Development related criteria
Agri-Vie’s mandate requires that its transactions also meet the following criteria:
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A demonstrably positive impact in general on rural socio-economic development: wealth creation, rural employment, entrepreneurship, diversification of the economic base;
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Participation by local entrepreneurs and shareholders in ownership & management;
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Utilisation of local resources;
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Socially and environmentally sustainable;
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Sound corporate governance.
With regards to South African investments, the prevailing codes on black economic empowerment (BEE) apply to each transaction.
| INVESTMENT FOCUS – 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:
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industry and sector status, prospects;
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business robustness and growth prospects;
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quality of the management team;
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capital structure and pricing;
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sustainability of development impacts of the investment;
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terms for a shareholders agreement.
Agri-Vie’s investment committee meets on an ‘as needed’ basis to decide on investment proposals from the investment management team.
A mutually acceptable term sheet is followed by in-depth business, financial and legal due diligence.
The above steps typically involve a period of 12-16 weeks.
Agri-Vie invests with a view to realise its investment in 7-10 years by way of one of the following mechanisms:
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Strategic (trade) or financial sales;
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Sales back to management or other shareholders;
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Listing on a main or alternative stock exchange;
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Appropriate dividend policies.
| AGRI-VIE’S 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 development support in the form of:
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business competitive strategy inputs;
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strategic marketing inputs;
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financial, structuring and general business planning advice;
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access to extensive business networks;
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general business guidance;
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active, hands-on management support 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 BEE through its focus on the involvement of local 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:
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Equity participation by historically disadvantaged persons;
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Participation by historically disadvantaged persons in the management and control of investee companies;
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Market access and other benefits to emerging farmers;
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A focus on improved participation opportunities for women in food and agribusiness;
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Work force skills development and training;
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Application of appropriate procurement practices;
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Participation in social corporate investment.
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