October 27, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Did you start to believe that SPAC deals, much like skinny jeans, have been shelved? Well, not so fast…

But first, some readers might have joined us after the SPAC attack that was 2020. Seen as an alternative to a traditional IPO, SPACs became more mainstream a few years ago as blank-check entities without commercial operations would use proceeds from their IPO to buy and merge with a private company for the purpose of bringing it public.

Employing this deal structure, Rose Hill Acquisition Corporation (Rose Hill) and Chile-based superfruit exporter Inversiones e Inmobilaria GHC Ltda (Prize) announced they have entered into a definitive business combination agreement that entails Prize becoming a U.S. publicly traded company by listing on the Nasdaq at an initial enterprise value of about US$425 million. 

This deal represents the first Chilean enterprise to initially list directly on a U.S. exchange – giving international investors new opportunities to access exposure to profitable, rapidly growing Latin American businesses. 

Additionally, Rose Hill also has forged a definitive $150 million Standby Equity Purchase Agreement (SEPA) deal with Yorkville Advisors to serve as additional equity financing in support of future expansion opportunities for the combined company.

Launched 16 years ago, Prize has grown into a major producer and distributor of high-quality berries, cherries, and nuts in the Southern Hemisphere. Working with more than 300 growers in Chile and Peru, and operating commercial offices in China and Canada, the company has its eye on international expansion, particularly in Peru, for year-round production.

This SPAC merger with Rose Hill and the connected public listing will provide the fuel for the growth of Prize into a global superfruit farmer and processor. Indeed, serving as a launching pad, Prize noted that this listing enables the company to embark on “the next phase in its global evolution”, through greater internal vertical integration in its business segments, and externally through a robust network of growers and retailers.

“Over the last 16 years, we have developed Prize into a global company providing quality, nutritious fruits to tens of millions of people in 30+ countries to feed the world,” said Alejandro García-Huidobro, founder and CEO, Prize. “The next stage of accomplishing this goal starts with expanding the global palette for superfruits by producing new, tastier varieties targeting differentiated consumers in the nascent Chinese market alongside more mature markets like the U.S.”

García-Huidobro continued, “The team at Rose Hill shares our vision of creating a global superfruits platform utilizing innovative technologies and production systems to improve our operations across the value chain and increase our fields’ productivity and resilience to climate change.”

Prize’s business operations in Peru and Chile form the basis of a counter-cyclical farming cycle able to supply the world’s major markets such as the U.S., EU, and China with fresh fruit in their off-season.

For example, Chile is the world’s top cherry exporting country and Prize is the world’s fifth largest cherry exporter, controlling two processing plants including one of the largest in the country, making it well positioned to supply the huge off-season demand from China due to high per-capita consumption and a yearly surge during the period of time around the Chinese Lunar New Year. 

Likewise, the company’s operations in Peru focus on blueberries – the number one fruit growing by consumption rate in the U.S. Great care has been taken to acquire land with ideal climactic conditions for fruit production to produce varieties chosen for their exceptional characteristics.

Prize plans to earmark a significant portion of the proceeds from this listing for the acquisition and cultivation of additional land in parallel with maximizing strong consumption trends and shifting consumer tastes toward higher-quality fruit.

“Rose Hill set out to unlock Latin America’s potential to produce world-class companies using the tools of the most international markets on Earth, the U.S. markets, and conversely, to provide U.S. and international investors with access to well-managed, profitable, rapidly growing Latin American businesses at a time when value appeared to be a fleeting proposition locally,” said Albert Hill, co-founder and co-CEO of Rose Hill.

He continued, “After speaking with dozens of companies, we believe we have found in Prize an exceptional enterprise at the intersection of our goals, and we share the Prize team’s excitement in building this company into an internationally renowned super-fruits platform.”

Rose Hill went on to state that in connection with the merger, it will seek a Private Investment in Public Equity (PIPE) offering that, if secured, will generate $65 million in total cash proceeds to Prize after closing.

Following the business combination, and depending on total redemptions and PIPE proceeds, existing Prize shareholders are expected to hold approximately 80 percent of the shares in the combined company. The balance of the shares will be held by PIPE investors, non-redeeming public shareholders of Rose Hill, and Rose Hill Sponsor LLC, which is expected to own 1.7 percent.

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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