TC Capital acquires a 6,550-hectare farm in Timiș county, a EUR 23.5 million transaction

Aurel Constantin 03/09/2020 | 12:23

TC Capital invests EUR 23.5 million into the acquisition of a grain and oilseeds farm located in Buziaș, Timiș county. This transaction is the second major agricultural investment of TC Capital after KC Agro, its first agriculture investment in 2014. Both investments are managed by Turkish businessmen Ali Capa and Ertugrul Karaevli. The property is situated approximately 35 kilometers from Timișoara and was bought from Gespie SAS, a French company.

The transaction was concluded in July 2020, with the assistance of Dentons law firm, and the acquisition was partially funded by Libra Internet Bank. This deal is further strengthening TC Capital’s position in the Romanian agricultural sector, in which the company already owns, through KC Agro, two other farms located in Buzău and Brăila counties, totalling circa 2,900 hectares.

The farm operates approximately 6,550 ha of agricultural land and TC Capital’s representatives plan to diversify the operations into value-add intensive farming activities such as blueberry and hazelnut orchards and extensive organic production of grains and oilseeds.

“With the purchase of this new farm, KC Argo’s exploited surface has reached nearly the 10,000-hectare mark, which makes it a notable agricultural player in Romania. Our operations are now distributed in different geographic areas, which makes the management of risks generated by the weather conditions easier. With this new project, we are also aiming to diversify our product mix. Besides conventional production of grains and oilseeds, we want to expand into value-added and high yielding products such as organic production of grains and oilseeds and intensive farming activities, namely the development of orchards in our new farm near Timișoara”, said Ali Çapa, CEO of TC Capital and Managing Partner of KC Agro.

The assessment and negotiation process started at the end of 2018, and the main advantages of this property are, amongst others, a good historical rainfall statistics and favourable microclimate, the quality of the soil in this area, and the compact nature of the land that makes it perfect for the cultures that will be grown here. Other benefits are the fact that partial irrigation systems are already in place, and the climate and the soil are propitious for high yield products that can thrive here. 

“We are optimistic that this property will be a profitable one starting from the first year of operations. KC Agro, our first investment into agriculture, has been a very successful venture in its 6 years, yielding strong operational returns throughout. Agriculture, as a sector, is very much shielded from the negative impact of economic crises, and the performance and valuations stay intact through the downturns, such as the one we are experiencing due to Covid-19 pandemic. We did not see the adverse effects of the crisis in agriculture so far. The price of agricultural land has been on the rise, now for the 20th consecutive year, therefore this makes the capital gains aspect of the business quite strong. With this opportunity, I would like to thank our financing bank Libra Internet Bank and our legal advisors Dentons for their support in this transaction”, concluded Ali Çapa.

Dentons Bucharest’s Managing Partner Perry Zizzi who boasts more than 25 years of experience in cross-border M&A transactions, with the support of senior associate Doru Postelnicu and a dedicated legal team, advised TC Capital on the transaction.

Libra Internet Bank, member of the American investment group New Century Holdings since 2003, is one of the most dynamic banks in Romania. With a network of 55 branches, the bank specializes in areas such as the liberal professions, real estate developers, agribusiness or the SME segment and pays special attention to modern technology and fintech partnerships.

“For over 8 years, Libra Internet Bank has been a solid partner for the Romanian agriculture. We have the solutions and the specialists to support this important pillar of the economy, and this financing represents another confirmation of our commitment to support the development of our clients. We continue to be a bank of action, with partners of action”, said Liviu Barda, Manager of the Large Corporate & International Desk – Regina Elisabeta Branch, Libra Internet Bank.

KC Agro, TC Capital’s first agriculture investment company, was established in 2014 by Ali Çapa and Ertugrul Karaevli. The first purchase was made up of a 1,900-hectare plot of land to perform agricultural operations consisting in grain and oilseed production in Luciu, Buzău county. For this project, the management team built up the farming operations from scratch. In 2016, the operations surfaces were extended by 830 hectares with the purchase of a second farm in Ianca, Brăila county. Currently, KC Agro operates approximately 2,900 hectares of agricultural land.

Besides KC Agro, TC Capital has investments in two other companies in real estate. One is Hyperion Towers, which is a 40,000 sqm office project in Pipera. Also, the company is a partner in the Cosmopolis residential project’s current phase comprising 178,000 sqm and over 2,200 residential units. TC Capital has around EUR 50 million of assets under management.

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