Aqua Capital acquires company in the nutrition industry.

São Paulo, Valor Econômico, March 17, 2016.
The Private Equity firm Aqua Capital has acquired a controlling shareholding in Yes, Brazilian producer of additives for animal nutrition. With the initial capital injection of BRL 40 Million from the new major shareholder, the company plans to increase its production capacity threefold.

Founded in 2009, Yes has caught Aqua’s attention not only due to its expressive annual growth – declared to be 35% in average –, but also for being positioned in a science branch that has been conquering space as questioning regarding use of antibiotics in animal farming increases. Being positioned in a middle ground between nutrition and pharmaceutics, Yes considers itself to be a “nutriceutics” company.

In the case of animal nutrition, this translates to the production of mycotoxin binders (solid and insoluble surfaces capable of adhering insoluble molecules in aqueous or gaseous medium), prebiotics and organic minerals, with the purpose of improving the animals’ performance and well-being, without harmful side effects. “This is one of the great promises in animal nutrition”, claims Victor Abou Nehmi Filho, CEO of Yes.

With 160 employees and plants in the cities of Lucélia, Borá and Novo Horizonte, Yes exports 20% of its production to 14 countries, mainly in Latin America. With the entry of Aqua Capital, it intends to build two new production units by the end of 2017, also in Lucélia and Borá.

The executive does not disclose revenue or production volume, but states that the company will invest BRL 70 Million in three years to better satisfy demand. The intention is to penetrate the USA and the European Union and export 50% of the produced volume.

These markets house the most advance discussions upon use of antibiotics in animal feed. The use of these medicines – some of them meant for human use as well – has become the main hypothesis for explaining the recent “superbacteria” phenomenon, those resistant to some drugs. According to this thesis, the consumer unwittingly ingests antibiotics by eating meat.

These drugs are added daily to animal feed in order to prevent diseases and speed up growth. Following the announcements given by large buyers in the North American retail, such as McDonald’s, to progressively reject meat from animals that were raised with the use of antibiotics, Yes and its competitors intend to develop viable alternatives.

In this context, prebiotics are watched with enthusiasm – says Nehmi – because they selectively stimulate the proliferation of desirable bacteria in the intestinal microbiota. “Antibiotics are cheaper, but they kill both bad bacteria (that cause diseases) and good bacteria”, claims Nehmi. “Prebiotics, on the other hand, are food for good bacteria, which improve the animal’s meat. The current dispute in the world is to feed desirable bacteria”.

With Aqua’s capital injection, Yes will invest in new kinds of prebiotics, and intends to become the only company in the world to have four distinct items in the category meant for animal feed. The company already detains a portfolio of almost 50 products that aim to improve absorption of minerals – the so called chelated minerals, with more than 90% of absorption by the animal, according to Nehmi.

Experienced in the land market, Nehmi spotted a new segment with great potential when founding Yes. In the endeavor, he enlisted the help of Gabriel Jorge Neto, ex-executive at Nutron, later acquired by Cargill, and Roberto Valeixo, from Alltech.

“With less than 10 years, Yes detains a well-developed operating model and is positioned in a segment in which demand outstrips supply”, says Sebastian Popik, founder of Aqua Capital, with more than USD 450 Million invested in agribusiness companies.


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