Dutch healthy food firm Wessanen has acquired Spanish firm Biogran for a purchase consideration of €67 million on a cash and debt-free basis, with closure of the deal expected later today (5 December).
As Spain's leading manufacturer and distributor of organic food and brands, Biogran reported revenue of €27 million in 2015 and expects full year
revenue for 2016 to hit €32m. It owns major Spanish brands such as El Granero and Ecocesta, which between them manufacture soy-based meat alternatives, organic seasonings, savoury spreads and jams, biscuits, cakes and breads.
Biogran did not confirm whether there would be any job losses following the takeover but Wessanen said the Spanish company’s management team would stay on board. The Spanish firm employs 128 people in its facilities in Madrid and Toledo.
Wessanen’s CEO Christophe Barnouin said the acquisition was a further step in its strategy to become Europe’s leader in organic and sustainable food.
"We are very pleased to welcome Biogran to the Wessanen family of leading organic and sustainable food companies. Biogran gives us broad access to the growth potential in one of the most dynamic countries in the European organic market: the Spanish organic market has grown at double digit rates over the last few years. The acquisition of Biogran represents a major growth opportunity for Wessanen to develop our business in the country."
Spain is currently Europe’s biggest producer of organic food in Europe, according to the Research Institute of Organic Agriculture (FiBL), accounting for 14% of the EU’s organic agricultural land although its market share of organic food sits at just 1%.
Ethical business
In recent years, Wessanen has been on an ethical growth drive, divesting parts of its business that do not fit in with its sustainability values, such as meat products, and acquiring companies that do.
This strategy has seen its turnover fall from about €4 billion in 2000, when it employed about 17,000 people, to €434 million in 2014 when it counted a staff of around 700, but it has been steadily building this up since then.
Recent acquisitions include UK-based gluten-free manufacturer Mrs Crimble and French manufacturer of organic tea, coffee and herbal infusions Ineobio, and today it counts brands such as Clipper tea, AlterEco and Bonneterre in its portfolio.
Healthy investments: Is a Wessanen takeover on the horizon?
Meanwhile, Wessanen itself has become the subject of acquisition speculation as 'Big Food' multinationals seek to tap into the increasingly lucrative health and wellness market.
The acquisition of WhiteWave by French dairy giant Danone for $12.5bn (€11.6bn) once again shone the spotlight on the attractiveness of investing in health and wellness brands, according to ING financial analyst Reg Watson writing in Dutch stock exchange journal ABM Financial News.
US-based WhiteWave makes premium organic dairy, pant-based alternatives to milk and non-GMO foods, and its portfolio includes Alpro, So Delicious
and Vega.
Around 14% of its sales come from Europe, and many of these brands enter into direct competition with Wessanen. After Danone announced its plans to buy WhiteWave, Wessanen’s share price increased 5%.
However not all analysts agree that Danone has its eye on the Dutch firm in order to consolidate its European market share.
"I see Wessanen not quite as takeover candidate and certainly not for Danone," analyst Joost van Beek from Theodoor Gilissen told ABM Financial News. "Wessanen is limited to Europe and is still very fragmented there, both regionally and in products and brands. This is difficult to achieve synergy."
In its Q3 of 2016, Wessanen said its own brands grew by 7.4% and reported double digit growth on several brands such as Bjorg, Bonneterre, Clipper, Kallø, Whole Earth and Isola Bio.