July 10, 2017

Colorado-based Platte River Equity announced the close of its fourth private equity fund – Platte River Equity IV – at its set hard-cap of $625 million.

Headquartered in Denver, Platte River’s investment thesis focuses on investments of between $10 million and $80 million in North American middle market operating companies in sectors including agriculture, ag chem products and services; inland waterway services; minerals; metals; energy and energy infrastructure; aerospace aircraft, and rail infrastructure.

Within these parameters, Platte River targets controlling stakes in companies with enterprise value of between $40 million and $250 million, and that have scalable business models and leading positions in niche market segments with high barriers of entry, according to the firm’s website.

With Capstone Partners as exclusive placement agent, funding for Fund IV was launched by Platte River in March of this year with an initial target of $550 million. The fund’s hard cap of $625 million was met with backing from the firm’s wide range of investors, including institutional investors, endowments, pension funds, private foundations, funds of funds, family offices, and high net worth individuals. However, across Platte River’s four existing funds, the firm’s collective principals remain the largest investors, having committed more than $150 million since 2006.

Capstone Partners also served as the exclusive placement agent for the firm’s third fund – Platte River Equity III, which also closed at its hard cap of $405 million in the fourth quarter of 2012. Funding was begun for the fund in June of that year, with an initial targeted corpus of $350 million.

Recent Ag Deployment

In December 2016, amid a growing wave of consolidation within the sector, Platte River announced it had acquired Connecticut-based Tiger-Sul Products, a global provider of sulphur fertilizers and crop performance chemicals, through Platte River Equity III, in partnership with the company’s existing management for an undisclosed amount.

Under the terms of the deal the selling party, H.J. Baker & Bro., Inc, which has owned Tiger-Sul since 2005, will retain ownership of a minority stake in the company. Tiger-Sul’s headquarters will remain in Shelton, Connecticut, and operations will continue from the company’s existing processing plants, offices, and warehouses located in Atmore, Alabama; Stockton, California; Alberta, Canada; and Shanghai, China.

This deal for Tiger-Sul was announced amid a string of mergers and acquisitions in the agricultural chemical and seed sector, driven by the need to achieve scale and expand sales networks amid multiple years of low commodity prices and farm incomes being under pressure.

Only one day after the announcement of Platte River’s acquisition of Tiger Sul, Monsanto announced that its shareholders overwhelmingly voted to approve the company’s pending $66 billion acquisition by Bayer AG.

Other concurrent deals within the ag chem space included a $130 billion all stock, 50/50 mega-merger between Dow Chemical and DuPont that would form DowDuPont – a chemical company that would be second in the world only to BASF; ChemChina’s $43 billion all cash takeover bid for Syngenta AG; the acquisition of Denmark’s Cheminova by FMC Corp for $1.8 billion in cash; and Lariat Partner’s acquisition of a stake in generic crop protection company, Willowood USA in exchange for a “significant investment.”

Prior to the deal for Tiger Sul, Platte River announced in May 2015 that it had agreed to acquire Profile Products LLC – a producer of innovative solutions to soil loss and accelerated seed germination for private and civil construction, agriculture, horticulture, energy, mining, sports facilities, and retail lawn and garden applications. Like the deal for Tiger Sul, the deal for Profile Products was structured in partnership with the company’s existing management, and was concluded using capital out of Platte River Equity III.

“As the clear market leader serving a diverse set of growing end markets and customers, we are enthusiastic about our investment in Profile Products,” said Kris Whalen, managing director of Platte River in a joint press release at the time. “With a strong foundation and active pipeline of new products, the Company is well positioned to better serve its existing customers and penetrate new markets. We look forward to helping John Schoch and the rest of the management team take full advantage of the available growth opportunities.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.