KKR buys Afriflora for 200 million, Marktlink advises

02 July 2014 Consultancy.uk

Private equity giant Kohlberg Kravis Roberts & Co (KKR) has reportedly invested $200 million in Afriflora, a large grower and distributor of roses based in Ethiopia. With the expansion capital, the firm expects to accelerate its growth ambitions, for KKR, the investment provides its first foothold on African soil.

Afriflora was founded in 2004 by Dutch businessman Gerrit Bar Barnhoorn. The business has remained within family hands, and is currently run by his sons, Peter Barnhoorn, who serves as CEO and John Barnhoorn, an Executive Director at the company. With a footprint of 450 hectares of land and 8,700 employees Afriflora is one of the largest producers of fair trade roses on the globe. The firm yearly sells 730 million roses through the Dutch flower auction FloraHolland. In FY14 Afriflora booked a profit of €17 million on a revenue of €81 million.

Roughly two years ago, Afriflora decided to actively dive into the venture capital market, with the aim of attracting additional capital. To facilitate the process, the family run business hired Marktlink, an M&A consultancy based in the Netherlands. The corporate finance experts supported Afriflora with finding the right investors, and after a number of targets had been selected, the due diligence. The decision ultimately fell in the favour of KKR, a US-based private equity firm. Last week the two firms confirmed that a deal had been struck, and although they refused to release any details, ‘informed sources’ and media report that the investment is around $200 million, which if true, would turn the KKR-Afrilora deal into one of the top 10 largest private equity transactions in Africa this year.

AfriFlora - KKR - Marktlink

Tim van der Meer, partner at Marktlink, comments: “Afriflora is a special company. Its sincere societal involvement, combined with an innovative commercial vision of the growers’ profession, has resulted in a special, fast-growing company which is extremely successful in all aspects. As advisor to the Barnhoorn family we were able, after a preparation period of several months, to contact a number of investors. We knew that KKR wanted to invest in companies that are active in Africa. Although several other parties showed an interest, it became quickly clear that KKR would be the ideal investor for this company.”

For the Barnhoorn family, who will remain active as management after the transaction, the investment provides ammunition to realise the ambitious growth targets, including 200 new hectares of production ground and growing the number of employees by 5,000 to nearly 14,000. For KKR, the deal reflects a first step in its plans to enter the African market. 

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