Brazil's retail agricultural inputs giant Lavoro has signed a definitive deal to go public in the business combination with special purpose acquisition company TPB Acquisition Corporation (NASDAQ:TPBA).
The transaction comes at an implied initial enterprise value of about $1.2B, representing a 4.4x on calendar 2023E pro forma adjusted EBITDA.
São Paulo-based Lavoro was founded in 2017 to offer farmers comprehensive portfolio of agriculture input and biologics products, which reportedly help reduce cost and increase yield. Through the acquisitions of more than 20 small- and medium-sized companies, Lavoro has become Brazil’s largest agricultural inputs retailer by revenue and market share, report.
Its vertically-integrated crop inputs business, “Crop Care,” is recognised as a major supplier of biologics and specialty fertilizers in Brazil.
Financials: Lavoro is projected to realize $2.3B in pro forma revenue in CY 2022E, a 63% increase year-over-year, and $3.2B in pro forma revenue in CY 2023E, up 40%.
In addition, the Company is projected to improve Pro Forma Adjusted EBITDA margins, and is expected to realize Pro Forma Adjusted EBITDA of $172M in CY 2022E and $279M in CY 2023E.
Closing of the transaction is expected in Q4 2022 where stock will get listed on Nasdaq under the ticker symbol "LVRO"
SPAC TPB Acquisition Corporation is sponsored by The Production Board, a San Francisco-based investment holding company founded and led by David Friedberg, founder of The Climate Corporation.
The Production Board has agreed to invest $100M in a private placement of common equity at $10 per share on closing, with an estimated $225M of net cash proceeds to Lavoro assuming no redemptions of Class A ordinary shares of TPB Acquisition Corp.
Friedberg will become a Lavoro board member upon closing of the proposed business combination, the report read.
"TPB’s world-class ag-tech expertise can enhance Lavoro’s solutions portfolio; together, we can expand Lavoro’s lead position in sustainable agriculture," commented Ruy Cunha, Chief Executive Officer of Lavoro.