Due Diligence

We are engaged by leading corporate and financial investors operating in and allocating capital to the food and agribusiness sector to conduct third-party commercial and technical due diligence on investment opportunities in crop inputs (products and services), large-scale farmland investment, crop production, transportation and logistics infrastructure (including storage/handling and port facilities), value-added processing, ag equipment and commodity trading companies.

Commercial/Market Due Diligence
  • Assessment of the target company’s competitive positioning in the geographic markets and end-user channels it serves

  • Evaluation of the target company’s potential for market growth and expansion

  • Analysis of industry growth drivers

  • Determination of asset base relevance and competitiveness

    • Age of assets

    • Vendors used

    • Equipment required

    • Facility configuration

    • Cost to refabricate

    • Cost to build

  • Assessment of the target company’s product and brand recognition and reputation in the marketplace

  • Operational performance and recommendation of strategies to improve financial performance and operational productivity post acquisition

  • Rigorous analysis of historical financial performance and opportunities for improvement assumed in projections

  • Assessment of the strength of the management team

Technical Due Diligence
  • Age of assets

  • Assessment of capacity constraints

  • Vendors used

  • Equipment required

  • Facility configuration

  • Cost to upgrade refabricate

  • Cost to build new

Investment Due Diligence

For ag-focused asset fund managers

  • Product development

  • Investment due diligence

  • Acquisition strategy/targeting

  • Portfolio company strategy

 

For institutional and family office end-investors

  • Researching agricultural markets

  • Developing and implementing ag-investment programs and strategies

  • Selection of fund managers

  • Monitoring performance/attribution

 

Representative Case Studies

Due diligence for a leading global PE firm investing in Brazil farmland

  • HighQuest was engaged to undertake due diligence on a 200K hectare farming company in Brazil the PE firm was considering acquiring

  • Issues regarding the operation’s management of price risk, logistics, farm management and financing were identified as problematic both for the valuation of the operation and its attractiveness as a portfolio investment

  • Based on HighQuest’s recommendation, the PE firm decided not to pursue the investment.

 

 Major Asian Trading Firm Considering Investment in a Northern Brazil Port Terminal

  • HighQuest was engaged by to client to validate the competitiveness of a port terminal in northern Brazil to handle the export of oilseeds and grains to China, Japan and Southeast Asia.

  • Based on HighQuest’s recommendation, the client pursued an investment in the port terminal.

 

Due Diligence on an Oilseed Processing Facility in Eastern Canada for a U.S. Financial Institution

  • HighQuest was engaged by a major U.S. non-bank financial institution to advise it regards with a debt facility it was considering providing for a Greenfield canola-soybean swing processing being built in Eastern Canada.

  • HighQuest’s analysis focused on validating the long-term competitiveness and economics of originating canola from Western Canada and selling products into the facility’s target market.

  • HighQuest also provided complete technical assessment for commissioning of the plant, monitoring construction to ensure that contractor was meeting construction timelines.

  • The institution decided to finance plant construction and engaged HighQuest to develop additional supporting analysis to assist in the syndication of the project financing.

 

Asian Trading Company Considering Investment in U.S. Gulf and PNW Port Facilities

  • The client was considering investing in two U.S. port facilities, one in the U.S. Gulf and one in the PNW.

  • HighQuest recommended that from a commercial/market perspective, both facilities represented attractive opportunities but advised that the asking price for both facilities were too high and the operating contract terms too stringent for the client to be able to meet its return of investment objectives.

  • While the client relied on HighQuest’s analysis and recommendations to renegotiate the offer price, it eventually decided not to pursue an investment in the two facilities.

 

PE Firm Considering Acquiring a Processing Equipment Manufacturer

  • HighQuest was engaged by the client to validate the growth potential of a processing equipment manufacturer, its competitive position in the markets it served, the strength of the target’s senior management team and the reputation of its products vis-à-vis its competitors amongst customers.

  • The client proceeded to the second round of the competitive bidding process but its final bid for the company was considered too low resulting in the company being taken off the market by its principal shareholder.

 

PE Firm Considering Acquiring a Grain Storage Equipment Manufacturer

  • HighQuest was engaged to validate the growth potential of a grain storage equipment manufacturer, its competitive positioning within the markets in which it was operating, and the reputation of its products, customer service and management team throughout its industry.

  • Based on HighQuest’s analysis and recommendation, the client decided to acquire the target.

 

PE Firm Considering Investment in an Asian Trading Company

  • HighQuest was engaged by the client to conduct due diligence on a commodity trading company focused on trade in the Indian Ocean region.

  • Early in the due diligence process, HighQuest identified critical issues concerning payment and credit risk.

  • Based on HighQuest’s investigation and recommendation, the client decided not to pursue this investment opportunity.  

 

Leading Asian Sovereign Wealth Fund Considering Minority Investment in a Crop Input Company

  • The client was considering making a minority investment in a North American biologicals company pursuing a roll-up strategy and engaged HighQuest to undertake due diligence of the company under an extremely tight deadline.

  • HighQuest leveraged its network of industry experts and executives to validate the target company’s strategy, the efficacy of its broad range of products, and its ability to gain traction in the adoption of its production and repeat sales by the distribution network as well as end-users.

  • Based on intelligence we gathered from the marketplace, HighQuest identified key inconsistencies between representations from the company and the industry’s experience with its products. HighQuest valued the company at well below the sponsor’s valuation and advised the client to not pursue the investment.

 

Global Commodity Trading Firm Considering Participating in a Bid for U.S. Milling Assets

  • HighQuest was engaged by the client to provide strategic operating and commercial analysis in support of its bid for U.S. wheat milling assets working alongside the client’s financial advisor.

  • HighQuest analyzed the prospective attractiveness of the U.S. milling industry, including an in-depth evaluation of financial returns, profit potential and key success factors, assessing the targeted milling assets relative to industry benchmarks.

  • The client decided not to pursue participation in the group bid.

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