Alothon Group LLC, a leading private equity firm that invests in middle market growth companies in Brazil, announced Friday the completion of an investment in Industria Riograndese De Oleos Vegetais Ltd (Irgovel), through its Fund II investment fund.

Irgovel, based in the Brazilian state of Rio Grande do Sul, is the leading rice bran food ingredients producer in Brazil, with the capability and know-how to process and market food-grade rice bran oil and rice bran-based co-products.

The firm is strategically headquartered where much of South America’s rice production is concentrated and conveniently situated approximately 60 kilometers (36 miles) from the port of Rio Grande, Brazil’s third largest seaport.

Alothon’s investment will provide Irgovel with the ability to increase manufacturing capacity and expand its product line further into rice based food ingredients for human consumption, an area of increasing demand in both Western and Asian countries. After the expansion is completed in the next 12 months, Irgovel expects to reach approximately US$50 million in annual revenues.

Irgovel, with 215 employees, currently offers approximately 38 products, both branded for sale to the national retail market in Brazil as well as products for export, primarily to major Asian markets. The company is a highly regarded innovator that consistently adjusts its portfolio of products to meet the demand of its markets and customers.

Ettore V. Biagioni, Managing Partner of Alothon said the investment in Irgovel continues the execution of Alothon’s strategy to make select investments in companies in Brazil that it believes will benefit from the increased purchasing power of the middle class and their desire for healthier foods and food ingredients.

Irgovel is the sixth investment in the food and beverage category by the Alothon team in Latin America and the second in Brazil in the last six months, following its acquisition of Casadoce.  Terms of the Irgovel investment were not disclosed by the Alothon Group. However, the group said the final agreement for the investment was reached in December 2010.

Alothon Group LLC is a private equity firm dedicated to Latin American investments. Over the past 15 years, Alothon has invested in more than 30 companies in Latin America. The firm is currently focused on mid to late stage buyouts in Brazil, with the investment strategy focused on controlling positions in businesses with strong franchise value that are expected to benefit from the country’s emerging middle class.

21 Jan 2011.