March 12, 2018

Agriculture Capital, the agriculture-focused investment arm of Equilibrium Capital Management, announced that it has acquired Columbine Vineyards, a fourth-generation family table grape operation located in Kern County, California, for an undisclosed amount.

Included in the transaction are 7,000 acres of farmland, and a range of operating assets including state-of-the-art cold storage facilities.

“Columbine Vineyards has been my family’s pride and joy for over 90 years, and we are delighted to be entrusting our legacy to Agriculture Capital and to the AC Foods family,” said Martin Caratan, longtime president and CEO.

Recent Close

In October of last year, Agriculture Capital announced the close of its Agriculture Capital Management Fund II (ACM Fund II) significantly oversubscribed at $548 million.

The fund, which had an initial cap of $400 million, invests in permanent crop farming operations in the Western U.S. focused on citrus, hazelnut, blueberry, and table grape production along with tangential mid-stream assets under a vertically integrated strategy resulting in a “vertically integrated enterprise that grows, packs and markets high-value produce,” according to the firm’s website. Drilling down into the fund’s mission, Agriculture Capital is targeting the formation of a “regenerative food and agriculture system that produces better food at scale and delivers health returns to investors while making a difference in our communities.”

As a part of its overall strategy, Agriculture Capital engages in an owner-operator investment model, using its own teams and expertise to operate its own asset portfolio.

“We believe that management is critical to success in the category and have built our team with that in mind,” Rob Hurlburt, principal at Agriculture Capital and lead of the firm’s sustainable agriculture strategies, told GAI News in 2015.

Fund II follows upon its successful predecessor, ACM Permanent Crops Fund, which closed oversubscribed at $255 million in early 2015. Both funds achieved the enviable, in that they each attracted commitments from large scale pension funds. The ACM Permanent Crop Fund received a commitment of $50 million from the $13 billion Maine Public Employees Retirement Systems (Maine PERS), which was later cut to $35 million due to the fund being oversubscribed, Andrew Sawyer, MainePERS CIO, told GAI News at the time. Another investor was the Washington State Investment Board (WSIB). Meanwhile, ACM Fund II went on to secure a $50 million commitment from the Ohio Police and Fire Pension Fund, and a $50 million commitment from the New Mexico State Investment Council.

Year-Round

Agriculture Capital’s goal has been to see its AC Foods business operate on a year-round basis. This deal brings its total permanent crop acreage from a prior 12,000 acres to 19,000 including table grapes, citrus, and blueberries, and adds cold storage facilities to its existing holdings of packing houses in Dinuba, Lindsay, and Tulare County, California; Sublimity, Oregon, and Australia.

“We believe the farms and facilities of Columbine will become an iconic part of our business and are looking forward to working with Columbine’s customers to meet the growing demand for healthy, delicious food,” said Tom Avinelis, managing director of Agriculture Capital.

Sustainability is also a core value shared between Agriculture Capital and Columbine Vineyards, and is noted by Martin Caratan, president and CEO of Columbine, as a key factor behind the decision to move forward with the deal.

“We were drawn to AC because of the extraordinary amount of care they bring to the land and to the communities where they operate. We share with them a deep commitment to the protection and conservation of natural resources and to supporting the people who make the production of food in the Central Valley possible. I can speak for all of the Caratans when I say we look forward to AC’s plans and are eager to support them as they move forward.”

“We’re very impressed with how Agriculture Capital has built AC Foods to offer customers year-round access to the best fresh fruits and nuts,” said Keith Andrew, sales manager for Columbine Vineyards. “At Columbine, our customers have always had extremely high expectations, and we’re looking forward to joining a team that is uniquely able to meet those kinds of expectations. AC Foods’ consumer focus and sense of purpose represent a true 21st century food business.”

Vineyard Tech

This sizeable addition of vineyard acreage to Agriculture Capital’s portfolio coincides with a maturation and consolidation of vineyard-focused tech in California.

In January of this year SkySquirrel, a Halifax, Canada-based permanent crop-focused drone company, announced it had raised $3 million in follow-on funding backed by Innovacorp, an existing investor in the company, and an unnamed private investor from Ontario, Canada. The company also announced its merger with Napa Valley, California-based VineView Inc. to create a new aerial imaging and crop diagnostic company called VineView.

Named one of Canada’s top innovative tech companies, SkySquirrel is able to aid commercial vineyards in reducing costs and vine loss, while improving yields through the early detection of aggressive viruses that specifically target vineyards, including leafroll disease and flavescence doree, which often leave a producer no other option but to rip out affected vines before the virus spreads to surrounding plantings.

In business since 2002, VineView similarly provides remote aerial imaging services to vineyard and high-value crop growers throughout California and the Pacific Northwest region of the U.S. The company’s specialized mapping products can indicate points of stress, disease, soil issues, and other challenges that can then be remedied via precision agricultural practices.

-Lynda Kiernan