AI-generated analysis
Falfurrias Capital Partners' investment in CIH aligns strategically with Falfurrias' focus on leveraging industry expertise to support growth in companies providing essential services within volatile markets. CIH, a provider of risk management solutions for agricultural commodities, offers a robust platform and suite of risk management tools that benefit producers and buyers navigating market volatility. By integrating CIH's technology-driven approach with Falfurrias' extensive experience in financial services, food, and training and education, the partnership aims to enhance CIH’s ability to serve its client base more effectively.
The transaction involves an undisclosed investment structure but likely includes a mix of equity and possibly debt financing to support CIH's anticipated expansion. Given that Falfurrias specializes in buyouts and growth capital investments for middle-market companies with strong fundamentals, the deal is expected to provide CIH with strategic guidance and financial backing to scale its technology platform further and introduce new services. However, specific details regarding valuation multiples or other key terms remain undisclosed.
This acquisition underscores a growing trend of private equity firms investing in agricultural tech and risk management platforms, highlighting the sector's resilience and potential for growth amidst fluctuating market conditions. CIH's focus on education and customized price risk management services positions it competitively within its space. As such, this deal may shift competitive dynamics by enhancing CIH’s service offerings and technological capabilities, potentially attracting more clients seeking advanced risk mitigation strategies.
Post-close, key risks and integration challenges for Falfurrias will revolve around ensuring seamless operations and technology upgrades while maintaining existing client relationships. Given the expertise of Mark Linsz and other Falfurrias partners joining CIH's board, the focus will likely be on strategic guidance and resource allocation to support CIH’s growth ambitions. The integration is expected to capitalize on synergies between Falfurrias' operational resources and CIH’s market presence, paving the way for future expansion into new geographies and service areas within agriculture risk management.
Falfurrias Capital Partners has made an investment in CIH, a Chicago-based technology-enabled firm providing education and customized price risk management services to businesses affected by volatility in the agricultural commodity markets. The deal closed on March 22, 2022.
| Acquirer | Falfurrias Capital Partners (US, Charlotte) |
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| Target | CIH (US) |
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| Deal type | buyout |
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| Close date | March 22, 2022 |
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| Buy-side financial advisors | Rock Gate Partners |
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| Legal buy-side advisor | K&L Gates |
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In conjunction with the partnership, CIH anticipates expanding its technology platform to provide a greater array of data-driven services to clients in hog, beef, dairy, poultry and feed, ethanol, crop, and grain markets. Co-founder and CEO Perry Iverson, President Patrick Gregory, and VP of Client Services David Ward will remain in their roles alongside the existing management team.
Deal Mechanics
The investment was made by Falfurrias Capital Partners to support CIH’s growth in risk management services for the agricultural sector. The terms of the deal were not disclosed.
Strategic Rationale
Falfurrias aims to leverage its industry expertise across financial services, food, and training and education to help CIH navigate market volatility and pursue a range of growth opportunities.
Financial Context
CIH was founded in 1999 and provides clients with risk management solutions including exchange traded and non-exchange traded hedging instruments as well as USDA-backed agriculture insurance solutions. Falfurrias Capital Partners, a Charlotte-based private equity firm, has raised approximately $1.9 billion across five funds.
Advisors
K&L Gates served as legal advisors to Falfurrias on the transaction.
Outlook
The investment from Falfurrias is expected to enhance CIH’s ability to serve an even wider array of producers and buyers looking to access risk management tools, supporting a cornerstone of the American economy – the agriculture and food sector.