Agtech acquisition alert! Israel’s ICL acquires Growers to boost digital offering

ICL, the $5 billion Israeli fertilizer company, has acquired North Carolina-based Growers Holdings, a data-driven farming platform that aims to provide farmers, agronomists, and other professionals with better decision-making capabilities. The terms of the acquisition were not disclosed but it is understood the deal was similar in size to recent precision ag acquisitions such as Agrible, which was acquired by Nutrien for $63 million in 2018.

Founded in 2011, Growers’ platform aggregates and structures data from manual sources and machine-generated sources to help farmers and their trusted advisors manage their operations and provide detailed agronomic advice for precision agriculture in a software plus services model. It is backed by a number of venture capital investors including Lewis & Clark, which led its Series A round, Middleland Capital, Tiverton Advisors and InnovaMemphis. A couple of these investors said they were “very happy” with the outcome while declining to comment on their return multiples.

With the acquisition, ICL hopes to enhance its digital product offerings as an extra source of revenue to its fertilizer business, Steven Valencsin, Growers Founder and CEO, told AFN.

“We met ICL through a mutual contact and as we started to share more about each others’ businesses, we started to realize that ICL’s vision in the digital ag space was clearly aligned with what we were trying to accomplish at Growers. That alignment centered on wanting to become a market leader in digital ag, understanding how a farmer can utilize their own data with technology to drive more profitable and sustainable decision making,” he said.

Maintaining independence

In contrast to Climate Corp’s Seed Advisor service, whereby it makes recommendations to farmers from its parent company Bayer’s portfolio of seeds, Growers will continue to offer independent product recommendations across seed and fertilizer. “A key component of this acquisition was independence,” he said. “We will have access to ICL’s resources and ecosystem in Israel but we’re not going to use the digital platform to push their products; it’s to help drive better decisions on the farm and they want to become a technology provider, adding this to their portfolio of products.”

ICL is no stranger to the digital agtech space investing in CropX, an Israeli soil sensor and ag analytics company in 2018, and announcing plans to work closely with Amazon Web Services to accelerate its digital offering late last year. It’s also active in the foodtech arena, developing an alternative protein technology for the meat alternatives market called ROVITARIS.

“The acquisition of Growers expands and strengthens our offering of agro-digital services and our capability to develop innovative solutions to generate higher agricultural yields and more efficient and sustainable agricultural practices,” Raviv Zoller, ICL president and CEO, said in a statement announcing the deal. “By combining Growers’ one-of-a-kind platform with ICL’s extensive agronomic know-how, we are accelerating our market reach and development roadmap to create an unparalleled digital service offering focused on providing agro-professionals with unique access to currently untapped and unstructured data in a simple, fast and actionable way.”

Future of Agtech M&A

Larry Page from Lewis & Clark is positive about the future of M&A in the agtech industry, which has been somewhat lacking in recent years after the $1 billion acquisition of The Climate Corp flung agtech into the VC spotlight. The only other acquisitions that have come close since were Blue River Tech by John Deere and Granular by DuPont, both for around $300 million. Elsewhere, acquisitions have tended to remain below the $100 million mark.

“Two of our portfolio companies have had interest from both investment bankers [regarding an IPO] and strategics. I don’t think we’ll see a blockbuster deal like Climate Corp any time soon, but I think the dust is settling on previous deals and strategics are hungry for digital assets,” he told AFN. Page added that he was mostly seeing interest from mid-sized agribusinesses and not the majors at this time but that the growing possibility of outcome-based pricing for input companies — whereby chemical and seed companies share the risk with farmers each year — was making it key for agribusinesses to have a strong digital offering in-house.

As part of the acquisition, Valenscin will stay on as CEO of Growers while COO Gabriel Wilmoth, who joined the company in 2017, will be leaving the company and will be seeking new opportunities.