Done Deals: Hicks Muse Grows Latin American Agricultural Co. –

Call it seed capital – Dallas-based Hicks, Muse, Tate & Furst is aiming to create a major South American seed platform, and will leverage advances in biotechnology to add value to the company.

Hicks Muse, along with Emergent Genetics, has acquired Argentina-based Produsem, S.A., a major wheat seed producer, its second large investment in the sector for the region. The company acquired Indusem Ltda., a Chilean seed production company, in February last year.

Partners at Hicks Muse would not disclose terms of the Produsem transaction.

Produsem, founded in 1962, has a 35% market share of Argentina’s wheat seed market. According to a statement from Hicks Muse, the company also has significant market share in the alfalfa, corn and sunflower seed markets. Produsem is the first seed producer Hicks Muse has acquired that has a focus on wheat. “[Wheat] is the last major field crop to benefit from biotechnological advances,” said Charles Tate, a partner at Hicks Muse.

“As the major [agricultural] technology providers, such as DuPont and Monsanto, stake out their involvement in North America and Europe, they will inevitably turn their attention to the rest of the world,” Tate said. “It’s been our strategy from the beginning – along with Emergent Genetics – to invest in and develop seed companies worldwide first.”

Hicks Muse has plans for Produsem to use the hybrid technologies of major multinational biotechnology companies in order to grow.

“If you’ve developed a gene that can alter an agricultural crop in a favorable way, farmers need seed companies to deliver that gene,” Tate said. “What we provide [as investors] is added value. We help those companies make the transition from a traditional product base. It requires a level of sophistication dealing with technology providers. Emergent Genetics has over 20 years experience.”

Emergent Genetics is Hicks Muse’s management affiliate for investments in the seed and biotech industries, of which the Texas firm now has five. Aside from the investments in South America, Hicks Muse acquired L. Daehnfeldi A.S., a Danish horticultural seed company, in November 1998. In December 1999, it bought Monsanto’s Stoneville Pedigreed Seed Co. And this past January, Hicks Muse acquired Mahendra Hybris Seeds Co. Ltd., a major Indian seed company.

Emergent Genetics’ stated strategy is to make direct equity investments in established seed and biotech companies, increase capacity and sales through additional capital investment, as well as to provide access to new seed traits through biotechnology and the financial, integrator and operations expertise.

Since its formation in 1989, Hicks Muse has completed or has pending 325 transactions with a total capital value of $40 billion, according to the company.