"The acceptance of private equity is increasing market-wide"

Dümmen Orange’s growth path started in 2010 when H2 Equity Partners acquired the predecessor company Agribio from the Japanese firm Kirin. Five add-on acquisitions were made followed by the merger with Dümmen in 2013. The company was subsequently rebranded Dümmen Orange. Since then, there have been six more add-on acquisitions. The company is currently owned by its management and private equity firm BC Partners.

Oaklins spoke to Roger Gerritzen about Dümmen Orange’s acquisition strategy and company culture.

“Retail clients prefer to do business with partners that are able to deliver a broad portfolio with many product varieties. Furthermore, the ability to deliver large quantities with a predictable product quality and delivery time are nowadays critical pre-conditions for success in our industry. To stay ahead of competition, we actively create scalability and we invest heavily in innovation. The sustainability trend also requires huge commitment and investment throughout the horticulture value chain. With our current scale and dedication to sustainability, we are creating a huge competitive advantage compared to smaller players that can’t match our scale and efforts. Therefore, we actively participate in the current consolidation wave. Our pioneering attitude is important to achieve and keep that first-mover advantage. At the same time, we aim to remain attractive for sellers by being innovative, by constantly developing new quality control and breeding technologies, and offering them a global distribution platform for their crops.”

Another development affecting the horticultural market is the strong appetite from financial buyers. Financial and strategic buyers are paying consistently high premiums for larger deals. So creating scale by consolidating several smaller companies is a proven method for value creation.

Oaklins asked Roger what he thinks about private equity in the horticultural sector. “Many companies within the horticultural market are small-sized family businesses that consciously choose to remain small. Dümmen Orange was also a relative small company. However, in 2010 we decided to team up with private equity. This enabled us to accelerate growth, create scale and become active in over 17 countries. Our current private equity owner, BC Partners, supports us in continuing to make strategic acquisitions, investing in R&D, and implementing our quality and sustainability targets.”

“The acceptance of private equity is increasing market-wide and is nowadays seen as a suitable alternative to grow your business, bring in retail and logistical knowledge, and invest in new technologies.”

“For the companies we like to acquire, we offer solid financial backing and a sound track record of smoothly delivered transactions.”

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