Canada: Manulife acquires Chilean fruit giant David del Curto

The Ontario-based asset manager has acquired a majority stake in the company to diversify its growing agricultural portfolio

Hancock Natural Resource Group (HNRG), a company of Manulife Investment Management, has completed a majority acquisition of David Del Curto (DDC), on behalf of its third-party clients. The acquisition helps to diversify its growing agricultural portfolio through its Farmland Plus initiative.

Farmland Plus assets include integrated crop operations such as transitional processing, storing and packaging for wholesale distribution.

The acquisition is in keeping with Manulife Investment Management’s priority to strategically grow its private markets offering across timber, agriculture, infrastructure, real estate, private equity and credit.

DDC is a leading Chilean fruit production, packing and export company. It produces over ten different fruit types across eleven farms, while also managing one of the largest nurseries in the country. The company also operates three packing facilities with a capacity of nine million boxes of fruit.

DDC will continue to be led by chief executive Fernando Cisternas and the management team, overseeing day-to-day operations and key strategic growth projects.

“David Del Curto is a well-respected firm with more than 65 years of success in fruit production and extensive sales relationships throughout Asia, Europe, North America and the Middle East,” said Stephen J. Blewitt, global head of private markets, Manulife Investment Management.

He added: “The acquisition strengthens and diversifies our existing portfolio as DDC is in a solid position; both currently with market-leading characteristics and for the future with state-of-the-art farmland facilities and opportunity for additional strategic growth.”

David Del Curto: Shareholders

The acquisition will also benefit from maintaining a connection to the previous ownership. The Corso Group (TCG), the investment unit of the Cortes Solari family office, acquired an ownership stake of DDC in 2005 and in this transaction will maintain a minority stake in the firm.

TCG’s experience in managing through Chile’s agricultural cycle and the overall continuity in management expertise will have both tangible and intangible impact on the future success of the company.

Oliver S. Williams, CFA, global head of agricultural investments at HNRG, said: “The acquisition of DDC opens a new market for our agricultural clients. Both the company’s track record and Chile’s reputation in the global agricultural markets make this an attractive agricultural investment.”

Strategic agriculture

Chile benefits from its geographic location and climate, allowing for high-value crop production. Because it is located in the Southern Hemisphere, it harvests and markets crops around the world at a time when Northern Hemisphere supplies are low.

DDC currently packs and markets fruit for approximately 90 third-party growers as well as fruit from its own farms.

“We are very excited to work on the ownership transition with the strong DDC management team that is already in place and value The Corso Group’s continuing partnership,” said William E. Peressini, chief executive of HNRG.

Peressini explained that HNRG will also work closely with the existing teams on land stewardship, which will include redeveloping existing orchards and developing those orchards that have not been under cultivation. “Through these efforts we will look to expand DDC’s production, as well as enhance existing and new marketing partnerships, to create additional opportunity.”

Company financials

In the 2018/19 marketing year, DDC accounted for 1.70% of Chilean fruit volume. DDC sells products to a diverse and global customer base and in the 2018/19 crop year, sold product to nearly 150 customers on four continents. 90% of the total amount of sales are shipped to Europe, North America and Asia.

DDC’s Cisternas, said: “By joining the Manulife Investment Management and HNRG team, we are able to rely on their extensive agricultural experience to expand our operations and further the reach of the firm. We feel the acquisition will bring tremendous additional resources to our teams and partners.”

HNRG was advised by Jon Pratt, managing director, mergers and acquisitions at Duff & Phelps and Tully & Holland on the transaction.