DENMARK – Global biosciences company Chr. Hansen has completed the sale of its Natural colours business to global investment organization EQT in line with its 2025 strategy of focusing on microbial and fermentation technology platforms.
The divestment covers business operations with asset transfers in more than 30 countries including the transfer of five separate corporate entities and around 600 employees.
According to a FoodIngredientsFirst report, the Danish-based company had agreed to sell its business to EQT in September 2020 for US$939 million on a cash and debt-free basis.
The company is reported to have received its full dues from the global investment firms and plans to use the proceeds to reduce its leverage.
Transfer of business activities has also been completed. Chr. Hansen however, notes that the full legal transition in a few countries will be finalized during the coming months.
In line with the transaction agreement, Chr. Hansen will provide various transition services for a period of up to two years to Natural Colors/EQT to ensure continuity of Natural Color business activities.
In its statement, Chr. Hansen said it intends to pay out an extraordinary dividend at least equal to a normalized ordinary dividend for 2019/20.
The one-off profits from the transaction, which is the difference between the book value of the transferred assets and liabilities and the transaction value received, will be accounted for as part of the profits from discontinued operations in Q3, notes the company.
The impact is estimated to be around US$763 million after taxes and transaction costs associated with the divestment.
The costs associated with Chr. Hansen corporate activities in Natural Colors that are not transferred to EQT will be partly covered by the fees from the transition services agreements, and will not impact the guidance on EBIT margin b.s.i. for this year.
Last October, Chr. Hansen Natural Colors inaugurated an R&D center to ramp up pigment, formulation and application capabilities in Montpellier, France, and pioneer new natural color solutions.
As a result of the new center, the food ingredients supplier forecasts major growth for its color portfolio, particularly for green, blue and brown hues.
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