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Valencian agriculture in the spotlight of investment funds

The Valencian fruit and vegetable sector has aroused the interest of investment funds, especially as a result of the crisis, due to the business opportunities and the attractive profitability it offers. This has been stated by Neil Collen and Eva Rodrigo, partners of Livingstone; an international firm which is an expert in mergers and the purchase and sale of companies, and which has been operating in the Region for more than two decades, advising medium-sized companies in this type of processes.

Neil Collen, who highlights the interest in the agro-food sector, points out that the smallholding structure makes it difficult to obtain better prices. "In England there are four cooperatives and they have a very strong bargaining power. Here there are four in each town and, in addition, they do not talk to each other," he says, convinced that achieving "a certain degree of concentration" is crucial to address the sector's problems.

Eva Rodrigo confirms that there is an on-going "process of accelerated concentration as a result of the entry of venture capital funds" into the fruit and vegetable sector. She considers this "an opportunity to obtain a partner with a strategic vision to open markets or professionalize the business," without disregarding the management team or necessarily taking control.

She explains that it all started with the creation of the giant Cítricos Global (Citri & Co), backed by the Barcelona-based Miura Private Equity fund after the purchase of the Martinavarro group from Castellón in 2016 and its subsequent merger with the Huelva-based Rio Tinto. In 2018, the Alicante-based Perales y Ferrer, one of the European leaders in the export of fresh lemons, also joined, and last year was the turn for Murcia's Frutas Esther, a European leader in the stone fruit sector.

Greater bargaining power
Other investment funds followed that model of creating "strong groups; leaders capable of competing at the international level," with the purchase of "medium-sized companies which were already leaders in their respective segments or with some competitive advantage that helps them stand out from the rest." They are then joined by other companies with the same activities (horizontal concentration) or from other links in the food chain (vertical), so as to "gain size, create synergies and have more bargaining power."

This is the case of the Madrid-based venture capital firm GPF Capital, which bought the Valencian Fruxeresa and the Murcian Natural Fruits at the end of 2019 to merge them into a group devoted to the production and sale of citrus fruits. It is also the case of the Valencian firm Atitlan, founded by Roberto Centeno - Juan Roig's son-in-law and Aritza Rodero, which entered the citrus and stone fruit sector with the purchase of the Murcian Frutas Romu.



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