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Iowa Cage-Free gets growth capital

By Staff | Mar 4, 2015

kersh@farm-news.com

GOLDFIELD – The cage-free egg industry is growing among consumers and a Wright County agribusiness is receiving an unspecified shot in the arm to get into that market.

Advantage Capital Agribusiness Partners LP, an investment fund formed through the U.S. Department of Agriculture Rural Business Investment Program, announced Feb. 23 that it is investing in Iowa Cage-Free LLLP in Goldfield to transform six existing egg-laying buildings into a cage-free facility.

According to Tim Hassler, ACAP fund manager, this is the first investment the 2014-established private equity investment organization has made. The exact amount of the investment has not been released.

Iowa Cage-Free was formed in 2009 by a group of industry professionals and Iowa farm families to build layer houses for cage-free egg production.

In order to fulfill a new larger contract with a current client, Iowa Cage-Free acquired an egg production facility north of Goldfield that previously operated caged layer houses.

ACAP’s investment assists Iowa Cage-Free with the acquisition and the renovations needed to transform the new facility to cage-free layer houses.

“We are excited to announce the closing of the fund and our initial investment in Iowa Cage-Free,” said Scott Murphy, ACAP’s chief investment officer. “Businesses in rural America face a shortage of investment capital and this fund attacks that problem by providing rural businesses with funding to grow and create new jobs in rural communities.”

This equity investment will allow Iowa Cage-Free to meet the needs of its customers during a period of growth in the cage-free egg production segment of the industry.

From his office in St. louis, Hassler said ACAP was attracted to Iowa Cage-Free because “It’s a well-run business with long-time management experience.

“They have long-term contracts with processors.”

He said cage-free eggs is a faster-growing segment than contemporary egg-laying systems and is consumer driven.

ACAP closed a $154.5 million agribusiness focused fund in late 2014.

Hassler said it formed under the auspices of the U.S. Department of Agriculture, but receives no government funding.

Rather, USDA oversees the investment of ACAP, Hassler said, to assure that at least 75 percent of its investments are in rural agribusinesses.

The fund focuses on businesses involved in the production, processing and supply of agricultural products across the country.

ACAP’s $154.5 million fund, managed by an affiliate of Advantage Capital Partners, includes participation from nine Farm Credit system investors.

These are AgCountry Farm Credit Services, in Fargo, North Dakota; AgStar Financial Services, in Mankato, Minnesota; AgriBank, in St. Paul, Minnesota; Capital Farm Credit, in Bryan, Texas; CoBank, in Denver, Colorado; Farm Credit Bank of Texas, in Austin, Texas; Farm Credit Services of America, in Omaha, Nebraska; Farm Credit Services of Mid-America, in Louisville, Kentucky; and United FCS, in Willmar, Minnesota.

The fund focuses on junior debt and equity investments that help rural communities, with a focus on businesses involved in the production, processing and supply of agricultural products.

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