Hoersholm, Denmark—Chr. Hanson is selling its Natural Colors business to EQT IX, a global investment organization, for EUR 800 million, according to a press release.
Natural Colors serves over 1,600 customers in the food and beverages industry, the press release says. It employs approximately 650 people and has grown by around 9% per year during the past five years; in 2018/19, the division generated sales of EUR 224 million.
The products are made from all-natural fruit and vegetable concentrates; the press release notes that this market is “supported by favorable secular megatrends, such as increasing consumer awareness around health and the environment,” as well as a demand for clean-label, plant-based, sustainable food.
EQT intends to build on the existing strategy of organic growth, with a focus on the U.S. and Asia. The company will also support expansion within the fragmented foods coloring market, using the Natural Colors platform for industry consolidation. EQT also intends to invest “significantly” in the company’s organization, digital infrastructure, sustainability capabilities, and supply chain setup.
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Flavor, Color, and Clean Label
Mauricio Graber, CEO of Chr. Hansen, said in the press release: “The divestment of the Natural Colors Division 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. 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.”
Mads Ditlevsen, Partner at EQT Partners and Investment Advisor to EQT IX, added: “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. 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.”
Klaus Bjerrum, Executive Vice President of Natural Colors Division, said: “I am very pleased to announce EQT as the new owner of Chr. Hansen’s Natural Colors Division. 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. 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 transaction is subject to customary conditions and regulatory approvals, and is expected to close in 2021.