Ospraie’s Special Opportunities Fund Buys an Edge
The deal announced today by Dwight Anderson's Ospraie Special Opportunities fund reminds me more of a deal the private equity crowd would have pulled off a year ago, but Ospraie wil likely turn out to be a better operator than the typical financial buyer:
ConAgra Foods, Inc., (NYSE:CAG), announced today that it has reached an agreement to sell its commodity trading and merchandising operations conducted by ConAgra Trade Group to the Ospraie Special Opportunities fund and other investors for approximately $2.1 billion, subject to certain adjustments. The Ospraie Special Opportunities fund is an affiliate of Ospraie Management, a leading investment management firm focused exclusively on commodities and basic industries with approximately $9 billion under management. ConAgra Trade Group will be renamed Gavilon LLC upon completion of the sale.
John Duryea, portfolio manager of the Ospraie Special Opportunities fund, said, “We are excited to acquire this dynamic business and look forward to working with Gavilon’s talented team to build on the success of its agricultural, energy and fertilizer commodities distribution, merchandising and trading. As a stand-alone entity, Gavilon will continue to provide its clients with the most innovative solutions. Through enhanced resource allocation and by pursuing incremental opportunities, Ospraie intends to further grow the business.” Business Wire
Perhaps we will see more of these deals; anything to get an edge:
Hedge funds and securities firms are also acquiring stakes in companies that produce and transport commodities to gather information they can use when trading futures contracts.
``Buying such assets gives a greater insight into the entire supply chain and helps to complement trading activities,’’ said Christopher Peel, chief executive officer of London-based Blacksquare Capital LLP, which invests in hedge funds. ``You get an edge over those that don’t have access to the information.’’ Bloomberg
The deal certainly seems like a win-win; it will free up working capital for Con Agra, and allow Ospraie to do what it does best. It appears that Anderson’s spanking in the copper market was a non-event and Anderson has apparently taken assets from $4 billion to $9 billion over the past 24 months.
Yes, the BuySide is the place to be, and working at Ospraie sure sounds like a lot of fun.
A conference call replay will be available after 1pm EST if you want to hear more about this innovative deal.
ConAgra Foods Announces Agreement to Sell Trading and Merchandising Operations to Ospraie
Business Wire
Ospraie to Buy ConAgra Trading Unit for $2.1 Billion
Bloomberg
Comments:
Next entry: Guessing Games on the SellSide
Previous entry: Huron Consulting Shareholders Get Scalped
