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Private Equity Advances in Agriculture

Private equity funds continue their incursions into agricultural commodity and supply chains.

The California-based bio-fuel crop company Ceres has raised USD 75 million in financing through private equity firm Warburg Pincus to pursue the commercial development of energy crops. The financial package will fund a private stock offering. Warburg Pincus holds position 14 in the global private equity fund rankings.

According to the Ceres press release of September 27, "Ceres plans to use the proceeds for research and product development activities in several dedicated energy crops, which are bred to maximize yields of plant biomass — the energy-rich source of a new generation of biofuels. The funds will also be used for capital expenditures and general corporate purposes.

"Ceres President and CEO Richard Hamilton welcomed Warburg Pincus’ vote of confidence. “Coming from one of the energy sector’s top private equity firms, this late-stage investment is a key validation of our growth plans. We now have the resources we need to expand the scale of our commercialization efforts, and the independence to broadly collaborate with downstream players in the transportation fuel industry.

"Mr. Hamilton noted that the genomics-based tools and biotech traits that Ceres has developed for corn and other row crops can be fully leveraged in dedicated energy crops. The company also plans to continue the discovery and licensing of its traits to other businesses outside of energy crops.

"Chansoo Joung, a Warburg Pincus Managing Director, said that the cellulosic biofuels industry shows promise of significant growth and is likely to become a material part of the transportation fuel market in the next decade. “We believe that Ceres is well-positioned to succeed as a leading supplier to energy crop growers and cellulosic biorefineries. The company has a strong track record in research and development and an intellectual property position that has been validated by industry-leading licensing agreements,” commented Mr. Joung.