Interview on M&A Activity in the Agricultural Market

📊 Mergers and Acquisitions activity in the agricultural market has slowed since mid-2022 due to inflation and interest rates.

🌍 CS Liew discusses the future of AG mergers and acquisitions and the global impact of inflation and interest rates.

📊 Mergers and acquisitions (M&A) have been a major focus of the speaker for the past six years, with a wide network of contacts globally.

⏸️ M&A activities have slowed down in the past year due to higher interest rates, increased costs of money, and fluctuations in valuations.

🔍 The speaker highlights the impact of geopolitical factors, such as the war in Ukraine, on M&A activity in the market.

💰 The rise in food prices and geopolitical rivalries are affecting commodity prices and creating disruptions in the market, impacting companies' valuations.

📈 Owners of companies are expecting high valuations due to the current market conditions, but it is important to be realistic and consider the actual requirements for closing deals.

🔒 While there are many opportunities available, it is crucial to ensure that valuations align with the desired outcomes in order to successfully complete mergers and acquisitions.

📈 Market access is a key focus due to the increase in the number of companies producing technical grade pesticides in India and China.

💼 Competition among technical grade pesticide producers has been intense and is expected to become even more intense in the future.

💯 High evaluation and interest rates are also important factors in the market.

📈 The pesticide market is growing at a slow rate of 2-3%.

💼 Intense competition is expected in the pesticide segment, leading to increased focus on major distributors.

💰 Future M&A activities will focus on gaining market access rather than research and development.

M&A activity in the agricultural industry is heavily regulated due to anti-trust issues.

Companies like Pacific Agriscience are actively involved in acquisitions, particularly in the bio-rational space.

Market access and distribution networks are important factors in M&A deals in the horticultural sector.

🔑 The EBITDA multiples in the agricultural space range from 12x to 18x, with some companies going for over 28x.

🌍 In Brazil, many companies are acquiring or setting up direct distribution channels to expand their market access.

💰 There is an increase in distressed startup companies facing financial difficulties and struggling to raise money.