Norwest exits crop-tech company for $1bn

The Minneapolis-based firm helped boost Becker Underwood’s revenues and headcount and expanded its geographic footprint during the eight years it held the investment.

Norwest Equity Partners, the private equity affiliate of Wells Fargo, has sold portfolio company Becker Underwood for just over $1 billion to global chemical company BASF, the firm announced last week.

While almost no financial details were disclosed, the company reported $246 million in revenues for the 12 month period that ended 30 September. The revenue number was “several multiples” above what it was at the time of Norwest’s initial investment, according to a market source.

Since the investment, Becker increased revenue and profitability “four-fold”, the firm said in a statement. The company also completed eight strategic add-on acquisitions and doubled its headcount around the world.

Becker Underwood develops technologies for seeds help reduce the need for fertilisers, herbicides, pesticides and fungicides, while enhancing the yield of plants.

It's a way to feed more people in a cleaner, better way.

Tim DeVries

“You get more soy beans per acre, more bushels of corn per acre, and you do it in a way that uses less fertiliser, nitrogen, pesticide, herbicide and chemicals,” said Tim DeVries, chairman and chief executive officer of Norwest Equity Partners. “It’s a way to feed more people in a cleaner, better way.”

Norwest was originally attracted to Becker because of the management team, led by chairman and chief executive officer Peter Innes, who had a “vision” the firm believed in, according to DeVries.

“What we did best [over eight years] was to help a person with a vision realise that vision, by putting in place action plans, by putting in place the people and other resources to really drive this idea,” DeVries said in an interview with Private Equity International last week.

With Norwest’s help, Becker Underwood boosted the research and development budget, added personnel and expanded into new geographies and acquired additional technologies, DeVries said.

The Becker Underwood investment came from Norwest’s seventh and eighth funds. The firm is now investing its

Crop
technology

Fund IX, which closed on $1.2 billion in 2008 and is about 50 percent deployed, DeVries said. Norwest also is investing from its third mezzanine fund, which raised $750 million to invest both in Norwest deals as well as outside transactions.

Norwest has always collected its capital from its sponsor financial institution, which was Norwest Bank until that merged with Wells Fargo. DeVries declined to comment on whether the firm plans to reach out to external investors for its next fund, as federal regulations make it tougher for banks to invest in private equity.

“We’re happy where we are and we’ve got a way to proceed with business as usual,” DeVries said.