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Private equity firms KKR, Brookfield and TPG, and sovereign wealth fund Abu Dhabi Investment Authority (ADIA) will invest a total of $500 million (about 4,040 crore) to buy minority stakes in group companies of Mumbai-based agrochemicals company UPL Ltd including its Advanta Enterprises Ltd unit.

“A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), Brookfield and TPG to invest 1,580 crore (around $200 million) for 9.09% stake in UPL SAS - India agri-tech platform at an equity valuation of approximately 17,380 crore ($2.2 billion)," UPL said in a regulatory filing on Friday. It said the move is part of a wider corporate restructuring to fuel the growth of individual businesses. The ADIA arm and TPG will also hold a combined 22.2% stake in UPL Cayman, the Global Crop Protection Platform (ex-India). Separately, KKR will invest $300 million for a 13.33% stake in Advanta Enterprises at a valuation of about $2.25 billion.

Meanwhile, both the ADIA arm and TPG will exit the non-crop protection business of UPL Corp, i.e., the International Seeds business and other global non-crop protection businesses (Decco, Animal Health and Health & Nutrition) for $241 million. While the International Seeds business will be divested to Advanta, the other global non-crop protection businesses will continue to be wholly owned by UPL Corp. UPL aims to complete the ‘corporate realignment’ exercise over the next 45-90 days, subject to closing conditions and required approvals.

In 2015, LSE and Mumbai-listed UPL announced its merger with group entity Advanta, a supplier of seed and seed technologies. The Shroff family controlled UPL operates in more than 138 countries, employing more than 13,000 people.

Jai Shroff, UPL’s group chief executive, said, “Since the acquisition of Advanta in 2006, UPL has built Advanta into a leading global seed company with a presence in more than 80 countries. Today, Advanta is a leading player in sustainable agriculture solutions, benefitting the livelihoods of farmers globally. As sustainable farming practices increase in priority around the world, Advanta is well poised for its next leg of robust growth." Advanta, established in 1996 through the merger of Royal Vanderhave Group and Zeneca Seeds, is focused on sustainable agriculture, providing farmers with locally adapted high-performing and quality hybrid seeds developed through decades of research and advanced technologies in traditional plant breeding seeds. Upon completion of the transaction, Advanta will operate as a standalone platform and aim to become a global sustainability leader in seeds.

“KKR will make its investment from its Global Impact strategy, which invests in businesses delivering solutions to address critical global challenges and contributing towards the United Nations Sustainable Development Goals," the private equity firm said in a statement. “KKR looks to collaborate closely with Advanta to further expand its business regionally and globally, including through bolt-on acquisitions, and maximize the Company’s growth potential," the statement added.

ABOUT THE AUTHOR

Beena Parmar

Been Parmar is a financial journalist based in Mumbai. She has reported on the banking and finance sector for over 10 years. She now writes on the alternative investment ecosystem from India - private equity, venture capital and especially startups. She loves to read about politics, society and humane stories.
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