Swedish EQT IX acquires Danish Natural Colours for €800 M

beetroot

writer icon Tormod Birch     FOODISM360   |   Business     🕐 30. Sep. 2020


Chr. Hansen is to sell its Natural Colours business, the leading global developer and manufacturer of natural colouring ingredients for food and beverages, to EQT IX.

Natural Colours’ underlying market is supported by favourable secular megatrends, such as increasing consumer awareness around health and the environment, the ongoing transition from synthetic colouring components to natural ingredients, and growing demand for sustainable and plant-based food.

EQT plans to invest significantly in Natural Colours’ organisation and strengthen its digital infrastructure, sustainability capabilities and supply chain setup. EQT will support organic growth in Natural Colours’ existing markets and acquisitive expansion in the highly fragmented food colouring market.

Natural Colours is expected to leverage on EQT’s inhouse expertise within digitalisation and sustainability, and EQT’s global advisory network, which possesses significant experience from developing strong ingredient companies.

Chr. Hansen Holding A/S and the EQT IX fund today announced that EQT has agreed to acquire the Natural Colours Division “Natural Colours” or “the Company”, a subsidiary of Chr. Hansen, the global bioscience leader and developer of natural solutions for the food, nutritional, pharmaceutical and agricultural industries.

The purchase price amounts to EUR 800 million.

Headquartered in Hørsholm, Denmark, Natural Colours is the leading developer and manufacturer of natural colouring ingredients, serving over 1 600 customers in the food and beverages industry.

The company is the global leader in the natural colourants industry in terms of innovation, application, formulation, product portfolio breadth and geographical reach. The Natural Colours Division employs approximately 650 people and has grown organically by around 9 percent per annum during the past five years up to 2018/19. The Company generated sales of EUR 224 million in 2018/19.

Natural Colours’ products are made from all-natural fruit and vegetable concentrates from sweet potatoes, grape skin, spirulina, carrots and beetroots. The products are primarily used within F&B applications where the conversion from artificial to natural colourants is highest, such as dairy- and fruit preparations, confectionery, ice cream, prepared foods and beverages.

Natural Colours’ underlying market is supported by favourable secular megatrends, such as increasing consumer awareness around health and the environment, the ongoing transition from synthetic components to natural ingredients, and a growing demand for sustainable and plant-based food. The Company’s solutions contribute to society and support several of the United Nations Sustainable Development Goals, including SDG 12 (Responsible Consumption and Production): via R&D into higher crop yields, use of renewable resources such as grape skin. SDG 13 (Climate Action): via a ‘Go Green’ project to make energy and CO2 improvements, using science-based targets.

EQT intends to build on the existing strategy of continued organic growth in current markets with a focus on the US and Asia.

EQT will also support acquisitive expansion within the highly fragmented foods colouring market by utilising the Natural Colours platform for industry consolidation.

Moreover, EQT plans to invest significantly in the Company’s organisation and strengthen its digital infrastructure, sustainability capabilities and supply chain setup. Natural Colours is expected to leverage on EQT’s inhouse expertise within digitalisation and sustainability, and EQT’s global advisory network, which possesses significant experience from developing strong ingredient companies.

Mauricio Graber, CEO of Chr. Hansen, commented: “The divestment of the Natural Colours Division completes the Review part of our recently launched 2025 Strategy. Chr. Hansen can now focus on fulfilling the ambition of becoming a pure-play, microbial and fermentation company with industry-leading, profitable growth. I am convinced EQT will be a great owner of the Natural Colours business which has a leading global position in the industry. During the process, it has become clear that EQT showed the strongest conviction in the potential of the business, and the highest dedication to the future development of it. I want to thank all the employees of the Natural Colours business for their contribution to Chr. Hansen over many years and wish them all the best in the future journey as an independent company.”

Mads Ditlevsen, Partner at EQT Partners, and Investment Advisor to EQT IX, commented: “We are immensely proud and humble of having been chosen as the future owner of Natural Colours. It is a high-quality and truly global business with a proud legacy of servicing customers all over the world for more than 100 years. We are highly impressed by the strong ESG profile, the high-quality organisation and talented people we have met during this process, as well as the dedicated focus on food safety. Natural Colours fits very well with EQT’s thematic investment criteria and is operating in two of EQT IX’s five prioritised sub-sectors within Industrial Technology. EQT’s ambition is to help the business achieve further growth both organically and through acquisitions.”

Klaus Bjerrum, Executive Vice President of Natural Colours Division, said: “I am very pleased to announce EQT as the new owner of Chr. Hansen’s Natural Colours Division. EQT has acquired our great business (pending closing) to grow it organically and inorganically based on our capabilities and organisation, and not least our leading market position. It is my conviction that this marks a new and exciting chapter for us, and I am excited to embark on this journey with EQT and all our talented employees around the world.”

The transaction is subject to customary conditions and regulatory approvals. It is expected to close in H1 2021.

Goldman Sachs acted as exclusive financial advisor, Gorrissen Federspiel as legal advisor, Baker McKenzie as legal advisor and Deloitte as M&A transaction services, tax and carve-out advisor to Chr. Hansen. J.P. Morgan and Nordea acted as financial advisors, Accura as legal advisor, PWC as M&A transaction services, tax and carve-out advisor and Boston Consulting Group as commercial advisor and Netlight as tech advisor to EQT.

With this transaction, EQT IX is expected to be 15-20 percent invested, based on its target fund size.



We believe that information should be free and will therefore never put up a paywall.

If you like reading our reports about the Scandinavian business scene and would like to donate towards the upkeep of the site, we would be very grateful. Click here to donate.

Most Popular Articles of October




Most Popular Articles of this Year