London-headquartered private equity firm BC Partners recently bought a majority stake in Dümmen Orange, valuing the Dutch flower breeder at around $500 million. The deal was advised on by M&A experts from six firms: Nielen Schuman, Holland Corporate Finance, Houthoff Buruma, Simmons & Simmons, Sincerius and William Blair, and funded by UBS and RBC.
Founded in 1963, with earlier operations tracing back to 1923, Dümmen Orange is a large producer of flower seeds, cut flowers and potted plants. The company, formerly known as DNA Green Goup (the firm was rebanded as Dümmen Orange just a few months ago), has approximately 6,000 employees globally, generating a revenue of €165 million, making it the globe’s third largest player in its industry, after Switzerland-based Syngenta and American Ball Horticultural. Dümmen Orange sells its products to intermediaries and garden centres globally, with production mainly taking place in countries such as Kenya and Guatemala.
Over the past five years Dümmen Orange has grown strongly, mainly through acquisitions in the Netherlands, Costa Rica and the United States, as well as through organic growth. Dümmen Orange is private equity backed – in 2010 H2 Equity Partners, a Dutch PE-firm, acquired the company (at the time operating under the Agribio brand) from Kirin, a Japanese organisation, for an amount described by investment bankers as “not much”.
Five years down the line, H2 and the Dümmen family, which held a minority stake, unveiled that a majority of the shares have now been sold to BC Partners, a London-based private equity house (established in 1986) with over €12 billion of assets under management. The interest from private equity firms for Dümmen Orange was high – according to media reports three firms made the final negotiations round, Advent, EQT and BC Partners, while earlier in the process CVC, Permira, Astorg and KKR also showed interest.
To bring the deal to a close the parties involved engaged with six M&A services firms. Buyer BC Partners – which earlier this year bought Britain's Cote restaurant brand – received financial advisory support from Nielen Schuman, a boutique Netherlands-based corporate finance firm (team: Menno Wagenmakers, Jan de Wilde, Marcel van de Wijdeven and Hidde van Nouhuijs). Seller H2 Equity Partners was supported by Duth law firm Houthoff Buruma (team of 10+ professionals led by Michiel Pannekoek and Bram Caudri), William Blair, an investment banking with 1,300 employees globally, and Sincerius Transaction Services, an Utrecht-based transaction support boutique (team: Michiel Koopmanschap and Thomas Daemen). The Dümmen family was given legal advice by Simmons & Simmons (Pieter van Uchelen and Michiel Wurfbain) and supported financially by Maarten Wolleswinkel and Frank de Hek, respectively partner and director at Holland Corporate Finance, a Dutch M&A boutique that focuses on mid-market transactions. UBS and RBC provided the debt for the transaction.
Under the flag of the new owner, Dümmen Orange believes it can capitalise on significant untapped market potential, with the private equity firm stipulating a steep growth trajectory for the flower breeder. Jean-Baptiste Wautier, Managing Partner at BC Partners says that to spur growth the company will invest in sales & marketing, technological advancements in the production process and increased integration of the business, which is forecasted to drive further synergies. Pursuing a number of selective acquisition targets is also on the management agenda. “Dümmen Orange is a thriving, innovative and growing business. We look forward to backing them as they pursue an ambitious growth strategy,” he comments.
Dümmen Orange’s management will stay on board says CEO Biense Visser, adding that he looks forward to the new chapter in the firm’s history. “As management, we have built a good understanding with BC Partners during the last period and we are pleased to see that their trust in our company is big. They will support Dümmen Orange to further grow and professionalise the company in line with the chosen strategy.” Mark Schermer, Communications Manager at Dümmen Orange, adds “The move to join BC Partners is part of our consolidation strategy. Clients, breeders and in particular retailers are growing their demands. The market is changing, and we are changing with it.”
The Netherlands-based Dümmen Orange is not the first flower company to catch private equity's eye. Last year U.S. buyout house KKR made its first venture into Africa with the purchase of a rose farm, while Swiss Syngenta is currently in the process of selling its flower seeds unit.