Chilean berry leader Hortifrut to list on stock exchange
Last month Chilean berry company Hortifrut announced it would supply blueberries to North American McDonald's restaurants through Naturipe Farms and other partner companies, while the business plans to reinforce its 'Ready to Eat' (RTE) technology with a processing plant in Chile this year. The business has bold plans to open up new markets in Asia and Latin America, but this takes capital, with the giant planning to list on the Santiago Bourse (IPSA) soon.
Hortifrut will sell off 29% of its ownership in a bid to raise capital by issuing more than 103 million shares, with plans to use the extra funds on investments such as the RTE technology, new blueberry and raspberry varieties, and opening up markets.
The company is working on the listing with Banco Penta and Celfin Capital, as it embarks on a three-week roadshow today that is hoped will raise US$75 million.
Celfin Capital director of corporate finance José Ignacio Zamorano, said the move was a great opportunity for investors to have a stake in an industry that is currently not present on the stock exchange, with a leading global company that finds itself in a great position to capture markets that have shown double-digit growth over the last decade.
"Investments Hortifrut has worked on in breeding programs for varietal development position it as a company with a significant competitive advantage in the industry, allowing it to take advantage of interannual high price windows for blueberries and blackberries, as well as compete in raspberries, a market dominated by just one player," said Zamorano.
Banco Penta corporate finance director Raul Schmidt highlighted berries were a "very attractive product", with room for demand growth around the world.
"Consumption per capita of blueberries in the U.S. is 526 grams a year while in Europe it's just 82 grams, and in newer markets it's just 2 grams. This low consumption is due to the limited supply of the product, which represents a great growth opportunity for Hortifrut."
Hortifrut general manager Nicolás Moller said berries were one of the most profitable fruit categories for retailers, which is why the company has developed a strong focus on breeding programs.
"Our opening on the bourse represents a great opportunity for investors as Hortifrut is already a leading company whose great strength is innovation, which has allowed us to be present in both hemisphere with the whole berry category, 52 days a year, thanks to a unique and successful business model that has made us the global industry leader," added president Victor Moller.
Victor Moller said there could be opportunities for further capital raising in the future.
"We want to have an open and liquid company on the stock exchange because the company doesn't end with this investment of US$75 million - we have the possibility to develop the company much more than that and there will be integrations, consolidation growth and developments in other countries."
Hortifrut has a trade presence in 37 countries with an integrated business model from breeding through to the end consumer. It is currently the biggest trader of blueberries and organic blueberries in the world, and number two in the overall berry category.
In the 12 months to March 2012 the business recorded sales of US$190 million, selling a volume of 28 million kg.
It has 30 distribution centers in the world, serving more than 400 customers and working with over 700 producers in both hemispheres. In March it registered 1,130ha of plantations.
The business maintains strategic alliances with Michigan Berry Growers, Naturipe Berry Growers, Mungers Farms and Atlantic Blue.
The Moller family is currently the biggest shareholder in the company with a 58% stake, followed by the Swett (18.3%), Novión (15.8%) and Urzúa (7.1%) families.
After the listing the Moller family will own 41.8%, the Swetts will own 13%, the Novión family will have an 11.2% stake and the Urzúas will have 5%.
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