Lavoro announces the acquisition of Cromo Química

Date:01-30-2023

Lavoro, Brazil’s largest agricultural input retailer, continues its expansion in Latin America with the acquisition of a majority stake of Cromo Química, based in Estrela, Rio Grande do Sul, Brazil.

The acquisition will put Cromo Química within the expanding portfolio of Crop Care, Lavoro’s vertically integrated business segment, which operates with biological inputs, specialty fertilizers and off-patent crop protection products. The acquisition is subject to regulatory approval and completion of other conditions precedent.

Founded in 2018 by Josir Neuls and Fábio Queiroz, Cromo Química specializes in the production of high-performance adjuvants and enhancers for agriculture, focusing on soybean, corn, cotton, and winter crops. The company has a strong presence in the South and Midwest regions of Brazil.

According to Ruy Cunha, CEO of Lavoro, this association strengthens Crop Care's participation in the market for high-performance adjuvants and agricultural enhancers. "The priority will be to keep expanding Crop Care's current distributors and cooperatives, and to improve the company's access to farmers in the North and Northeast regions of Brazil,″ Cunha said.

"We expect that partnering with Latin America’s largest ag inputs retailer will foster our growth. With this alliance, we have a clear vision of our expansion plan for the coming years, with new product launches, governance structuring, and market access,″ said Josir Neuls, Cromo Química's CEO.

The transaction is aligned with the strategy to expand Lavoro's offer of sustainable solutions, which includes biological pesticides, post-patent agrochemicals, and specialty products.

Cromo Química currently has over 40 products in its portfolio. Lavoro believes that its high-performance adjuvants promote better use of agrochemicals and biologicals sprayed on crops, generating greater yields, and boosting farmer productivity. In addition, all products are sustainable, mitigating environmental impacts.

One of Crop Care's priorities for the coming years is to expand its production and sales capacity. "We expect to invest in strengthening the sales force of Cromo Química, back-office areas, and especially research and development. The future of agriculture lies in safe technologies that value the environmental agenda and respect the legislation, without leaving aside the profitability of the farmer,″ said Marcelo Pessanha, CEO of Crop Care.

In fiscal year 21/22, the subsidiaries of Crop Care delivered, together, approximately R$ 438.6 million in revenue. Agrobiológica Sustentabilidade alone reached a total of over 11 million hectares treated with its products in Brazil.

Lavoro and TPB: a shared vision for global food security

Lavoro announced in September 2022 its intent to become the first US-listed pure-play Latin American agricultural inputs retailer through a business combination with The Production Board’s (″TPB″) Special Purpose Acquisition Company, TPB Acquisition Corporation I (″TPB Acquisition Corp″).

The transaction aims to bring together The Production Board’s agriculture technology expertise and Lavoro’s portfolio of businesses and market penetration to help transform Latin America into a global breadbasket, improving global food security and sustainability.

The transaction is expected to close in the first quarter of 2023, subject to the satisfaction of customary closing conditions (including the approval of the shareholders of TPB Acquisition Corp.). A new US publicly-listed entity is expected to be listed on the Nasdaq under the ticker symbol ″LVRO.″ Upon listing, Lavoro will become the first US-listed pure-play Latin American agricultural inputs retailer.