Latin America's Agricultural Revolution: Lavoro Eyes US Public Markets with $1.2B Valuation

Brazil’s dominant agricultural inputs retailer is making its way to American exchanges in a landmark transaction that underscores growing investor appetite for sustainable farming solutions. Lavoro Limited, having emerged as the continent’s leading supplier of agricultural inputs through a aggressive acquisition and organic growth strategy, will merge with The Production Board’s SPAC vehicle (TPB Acquisition Corp. I) to achieve public status on Nasdaq under ticker “LVRO.”

The deal values the company at approximately $1.2 billion in enterprise value—translating to 7.1x its projected 2022 adjusted EBITDA of $172 million and 4.4x the 2023 estimate of $279 million. This positioning marks a significant capital infusion moment for the agri-tech sector in emerging markets.

Financial Architecture and Capital Deployment

Lavoro’s pro forma financial trajectory tells a compelling growth story. Revenue is projected to reach $2.3 billion in calendar 2022 (a 63% surge from prior year) and climb to $3.2 billion in 2023—representing continued 40% annual expansion. The EBITDA margin expansion demonstrates operational leverage as the business scales.

The financial structure involves multiple components: The Production Board will deploy $100 million through private placement at $10 per share, while TPB’s trust account contributes approximately $180 million. Combined with secondary proceeds from existing investors managed by Patria Group ($30 million), the transaction is expected to generate roughly $225 million in net proceeds—assuming minimal shareholder redemptions. After transaction costs, Lavoro secures substantial dry powder for growth initiatives.

Current shareholders, including Patria-managed funds, maintain 100% equity rollover up to $250 million in gross primary proceeds, positioning them to own approximately 74% of the merged entity upon closing.

The Business: Scale Meets Sustainability

What distinguishes Lavoro is the convergence of scale with sustainability focus. Operating through 193 retail locations across Brazil, Colombia, and Uruguay, the company maintains a network of 878 technical sales representatives serving over 53,000 farmer clients. This direct-to-farm engagement model—meeting customers multiple times yearly to optimize input selection—creates defensible competitive advantages.

The company’s vertically-integrated “Crop Care” segment produces specialty fertilizers, crop protection products, and proprietary biological inputs. These biologics represent the fastest-expanding segment within Latin American agricultural inputs, with the category exhibiting 26% compound annual growth between 2017 and 2021.

Lavoro’s proprietary biologics formulations—derived from microorganisms and biomolecules—address a critical farmer need: achieving higher yields while reducing synthetic chemical dependency, environmental persistence, and carbon footprint. The economic benefit flows both directions: farmers capture improved soil health and productivity while decreasing synthetic fertilizer volumes.

Growth Mechanics and Digital Expansion

The company’s 53% compound annual revenue growth between fiscal 2020 and 2022 stems from dual motors: acquisition integration and organic expansion. Since founding in 2017, Lavoro has acquired over 20 small-to-medium agricultural retailers, consolidating a fragmented market.

Organic growth accelerates through product portfolio expansion and operational efficiency gains. The 2020 digital commerce launch has matured into a meaningful channel, accounting for $81 million—roughly 5% of FY2022E sales. Digital agronomy services extend beyond e-commerce, leveraging soil chemistry analysis, microbiome profiling, and weather modeling to guide farmer purchasing decisions and boost productivity metrics.

Strategic Positioning: Why This Matters for Food Security

The investment thesis extends beyond financial returns. Latin America’s agricultural capacity directly impacts global food security amid increasingly fragile supply chains. The FAO documented 750 million people subsisting on under 1,200 calories daily in 2021—a 200 million person increase within four years. Closing the 56% calorie production gap by 2050 requires technology adoption among small and mid-sized farmers.

In Brazil, 65% of agricultural land operates under farmers managing 250-25,000 acres—precisely the demographic where Lavoro operates. Agricultural retailers function as critical technology distribution channels to this farmer population. Lavoro’s direct engagement model, combined with biologics expertise, positions it as a lever for productivity gains across the region’s farming base.

The Production Board’s Agriculture Thesis

David Friedberg’s role as The Production Board founder carries particular weight. His prior venture, The Climate Corporation (acquired by Monsanto in 2013), built Climate FieldView—the globally dominant digital agronomy platform deployed across 180 million acres in 23 countries. This pedigree signals serious ag-tech conviction backing the combination.

TPB’s strategy centers on applying this ag-tech expertise—market intelligence, digital infrastructure knowledge, and innovation frameworks—to Lavoro’s retail and biologics platform. Friedberg is expected to join Lavoro’s board upon transaction close, ensuring continued alignment.

Market Expansion Roadmap

Management has outlined deployment of proceeds toward:

• Organic retail network expansion through new store openings
• Acquisition of additional agricultural input retailers and distributors
• Product development around sustainable solutions and digital service tools
• Geographic expansion throughout the Latin American region

The dual ownership structure—TPB sponsor promote shares vest based on stock price performance above $12.50 and $15.00 levels over three years—aligns incentives toward value creation.

Transaction Status and Timeline

The combination has secured unanimous board approval from both entities. Closing is targeted for Q4 2022, contingent on TPB shareholder approval and standard regulatory clearances. Barclays serves as capital markets advisor, with Cooley LLP handling TPB legal matters and Davis Polk & Wardwell advising Lavoro. White & Case provides counsel to Barclays.

This transaction positions Lavoro as the first US-listed pure-play Latin American agricultural inputs retailer, opening capital markets access for a scaled, profitable operation with significant runway for geographic and product expansion. The convergence of agricultural technology expertise, emerging market agricultural retailer consolidation, and global food security imperatives creates a compelling investment thesis for public market participants focused on sustainable productivity gains in emerging economies.