French agricultural group InVivo said on Tuesday that it plans to raise 50 million euros ($59 million) for its Bioline division, which develops crop inputs such as seeds and pesticides, by bringing in outside investors, according to Reuters’ report
Financial investors will pay 50 million euros in exchange for acquiring a 20-30 percent stake in the division in a deal expected to be finalised in the first quarter of 2018, Chief Executive Thierry Blandinieres told reporters.
Bioline is the new name for the crop input division and the new investment will support a plan to double Bioline’s sales to 500 million euros in 2020. InVivo will then conduct a second 50 million euro capital expansion to help the business grow to 1 billion euros in sales by 2025, Blandinieres said.
InVivo, a grouping of around 200 farmer-owned cooperatives, is focusing on precision agriculture through a network of pilot farms, for which it sees the potential to reduce use of crop chemicals by up to 50 percent.
InVivo previously opened up its animal nutrition unit Neovia to outside investors, and Blandinieres said it also plans to bring in minority investors for its new wine division.
He reiterated that InVivo is looking to make an acquisition in the United States to help build a wine distribution network.
The group reported on Tuesday earnings before interest, tax, depreciation and amortisation (EBITDA) of 133 million euros for its 2016/17 financial year to June 30, up from 116 million euros in the previous year.
Group sales fell to 5.5 billion euros from 6.4 billion, as a poor French cereal harvest hit InVivo’s grain trading unit.
The grain trading division made another loss, excluding port silo revenue, in a context of tough international markets, but should break even this year, Blandinieres said.
InVivo cut jobs at its grain trading unit this year and also launched a digital export platform to make it more efficient in procuring grain from French cooperatives.
To make it less dependent on French grain, InVivo has developed a trading office in Brazil, which handles maize and soybeans, and another in Singapore, now focused on supplying grain to the Middle East, Blandinieres said.
In Brazil, the acquisition of agricultural cooperative CCAB this year would allow Bioline to expand in a major agricultural economy and also support InVivo’s trading activities, he said.