Vtraction.com
deals
vTraction pulls in more players
Megadeal - US move
into Spanish dairy
Equity placement in India
14 What's NewS Issue 2 March 2000
Our recently inaugurated Internet busi-
ness-to-business 'e-cooperative',
vTraction, has also been in the global
media spotlight of late, not least in
London's Financial I inies (FT). The FT
recently reported on an
important development
within the vTraction
sphere; specifically, the
planned merger of two
associated e-commerce sites, Farms.com
of the US and eHarvest of Canada, in
anticipation of an initial public offering
(IPO) later this year. The deal will give
vTraction a 40% stake, a significant part
of which will be placed with F&A compa-
nies that are partners in vTraction. The
merger comes against the background of
intensifying competition and an earlicr
announcement by Cargill, DuPont, and
Cenex Flarvest States of plans to create
Rooster.com, an 'electronic mail' for the
farm industry. Meanwhile, vTraction is
negotiating with an important Midwest-
ern venture capital company which may
shortly join vTraction as an equity partner
in Farms.com. It also expects to announce
that between five and 10 new food and
agri companies from a wide range of
sectors will join vTraction this month as
so-called 'e-members' (in this case the 'e'
means economie) and will contribute cash
or other assets. Moreover, says the group's
CF.O Ejnar Knudsen, 'over 150 companies
work closely with Rabo F&A clicnts to
advise them on ideal e-business models in
his capacity as vTraction vice president
Jobn.Sweeney@vTraction.comSwecney
was with Deloitte Consulting as a special
ist in supply chain management, strategie
sourcing, and e-commerce software prior
to joining vTraction. In these and other
ways, the vTraction site is being config-
have registered interest in cooperating
with or becoming a partner in vTraction.'
This is partly the outgrowth of a media
marketing campaign launched this month.
John Sweeney, a new team member, will
ured to be a potentially valuable opportu-
nity for Rabobank to deliver value to
existing and potential clients; moreover,
the bank is featured proniinently on the
site as a first source of financial services.
Rabobank India Finance has arranged
an important Rs 162 crore (USD 37
million) equity placement for Morepen
Laboratories, one of India's leading
generic bulk producers of Loraladine
(an antihistamine). The cliënt has seen its
sales expand more than sixfold in the last
four years to Rs 320 crore (USD 75
million), and has six new drugs in the
pipeline. The funding program will help it
pursue its strategie ambition to become a
preferred bulk generic drug supplier on
international markets in such fields as
cardiovascular, anti-cholesterol, anti-
depressant, anti-gastric, and respiratory
drugs. The deal has substantially
enhanced Rabo India Finance's profile as a
powerful player delivering high-value
financial solutions for clients on the
domestic market. Analysts expect that
global trends in the pharmaceuticals
industry will generate increasing pressure
for further consolidation on the Indian
market, and this in turn will lead to more
M&A opportunities for the Rabobank
team in India. Other successes on the
Indian market will be reported in What's
NewS shortly.
Rabobank International has scored a
fresh and significant success in
Madrid, having won a mandate to act as
financial advisor to the Suiza Foods
Corporation, the leading US dairy group,
in the client's acquisition of Spain's Leche
Celta, an important Spanish dairy
producer. The deal represents the biggest
M&A transaction ever carried out in the
Spanish dairy market, as well as the first
foreign acquisition by the American firm.
Both companies are RI clients and the
conclusion of this deal sets the stage for
the combined Suiza/Leche Celta's strategie
ambition to jointly establish the company
as the Spanish market leader within four
to five years' time. RI acted on a mandate
from both firms to arrange and under-
write acquisition finance, as well as to
structure financing for the post-takeover
strategie investment plan for Leche Celta.
We delivered a two part financing package
that included a seven-ycar amortizing
term loan up to EUR 42 million to partly
fund Suiza's down payment on the acqui
sition, and an additional seven-year quasi-
bullet revolving credit facility of up to
EUR 15 million to partly finance the
investment plan. Says Madrid's Santiago
Aranguren, 'this is the largest acquisition
finance deal to date in the Spanish dairy
sector, and I think that it has positioned
us very well as one of the key refcrencc
banks for future M&A activity in this
field. Indeed, I think M&A and acquisi
tion finance mandates are very likely in
the near future.'
