Chr Hansen divests its Natural Colours Business to private equity firm EQT

Image courtesy: Sun Basket

DENMARK – Chr Hansen Holding, an ingredients maker, has announced that it would sell its Natural Colours Business to Swedish private equity firm EQT for 800 million euros (US$930.40 million) on cash and debt free basis.

This agreement concludes the strategic review of the Company’s portfolio announced in July 2020, where Chr. Hansen’s Board of Directors and the Executive Board decided to explore strategic options for the Natural Colors business as it does not share the microbial and fermentation technology platforms.

The company said its long-term financial forecast is unaffected by the divestment. The deal is expected to close during the spring of 2021.

“The divestment of Natural Colors 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,” Mauricio Graber, CEO of Chr. Hansen, said.

“The divestment of Natural Colors 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,”

Mauricio Graber – CEO, Chr. Hansen

“I am convinced EQT will be a great owner of the Natural Colors 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 Colors business for their contribution to Chr. Hansen over many years and wish them all the best in the future journey as an independent company.”

Chr Hansen makes probiotic products that support the immune system and has enjoyed a boost in sales as the pandemic forces consumers to opt for prepared food products.

The company, whose customers include the world’s largest food manufacturers such as Nestle and Danone, said in July it would explore options for its natural colours unit, which does not use its core fermentation technology.

“We are immensely proud and humble of having been chosen as the future owner of Natural Colors. 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,” Mads Ditlevsen, Partner at EQT Partners, and Investment Advisor to EQT IX, said.

“We are highly impressed by the strong ESG profile, the high-quality organization and talented people we have met during this process, as well as the dedicated focus on food safety.

“Natural Colors fits very well with EQT’s thematic investment criteria and is operating in two of EQT IX’s five prioritized sub-sectors within Industrial Technology. EQT’s ambition is to help the business achieve further growth both organically and through acquisitions.”

Chr Hansen, which sells enzymes and bacteria used in products like dairy, dietary supplements and wine, said that month it had seen rising demand for probiotics, live bacteria used in yoghurt and dietary supplements.

“I am very pleased to announce EQT as the new owner of Chr. Hansen’s Natural Colors business. EQT has acquired our great business (pending closing) to grow it organically and inorganically based on our capabilities and organization, and not least our leading market position,” Klaus Bjerrum, Executive Vice President of Natural Colors, said.

“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.”

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