Natural Colors moving to EQT
On the colouring foods side, Chr Hansen is selling its natural colours business to EQT IX. Denmark-based Natural Colors’ underlying market is supported by favourable megatrends, such as increasing consumer awareness around health and the environment, the ongoing transition from synthetic colouring components to natural ingredients, and a growing demand for sustainable and plant-based food.
EQT plans to invest significantly in Natural Colors’ organisation and strengthen its digital infrastructure, sustainability capabilities and supply chain setup. EQT will support organic growth in Natural Colors’ existing markets and acquisitive expansion in the highly fragmented food colouring market, it says.
The Natural Colors Division employs approximately 650 people and has grown organically by around 9% per annum during the past five years up to 2018/19. The company generated sales of €224 million in 2018/19.
Natural Colors’ 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 food and beverage applications where the conversion from artificial to natural colourants is highest, such as dairy and fruit preparations, confectionary, ice cream and beverages.
Mauricio Graber, CEO of Chr Hansen, comments: “Chr Hansen can now focus on fulfilling the ambition of becoming a pure-play, microbial and fermentation company with industry leading, profitable growth.”
Klaus Bjerrum, executive vice president of Natural Colors Division, says: “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 purchase price is €800 million. The transaction is subject to customary conditions and regulatory approvals. It is expected to close in in the first half of 2021.