Chr. Hansen Holding A/S and the EQT IX fund announced that EQT has agreed to acquire the Natural Colors Division, a subsidiary of Chr. Hansen, the global bioscience leader and developer of natural solutions for the food, nutritional, pharmaceutical and agricultural industries. The purchase price amounts to EUR 800 million.
Headquartered in Hørsholm, Denmark, Natural Colors is the leading developer and manufacturer of natural coloring ingredients, serving over 1,600 customers in the food and beverages (F&B) industry. The company is the global leader in the natural colorants industry in terms of innovation, application, formulation, product portfolio breadth and geographical reach. The Natural Colors Division employs approximately 650 people and has grown organically by around 9% per annum during the past five years up to 2018/19. The company generated sales of EUR 224 million in 2018/19.
Natural Colors’ products are made from all-natural fruit and vegetable concentrates from sweet potatoes, grape skin, spirulina, carrots and beetroots. The products are primarily used within F&B applications where the conversion from artificial to natural colorants is highest, such as dairy- and fruit preparations, confectionary, ice cream, prepared foods and beverages.
Natural Colors’ underlying market is supported by favorable secular megatrends, such as increasing consumer awareness around health and the environment, the ongoing transition from synthetic components to natural ingredients, and a growing demand for sustainable and plant-based food. The company’s solutions contribute to society and support several of the United Nations Sustainable Development Goals, including SDG 12 (Responsible Consumption and Production): via R&D into higher crop yields, use of renewable resources such as grape skin. SDG 13 (Climate Action): via a ‘Go Green’ project to make energy and CO2 improvements, using science-based targets.
EQT intends to build on the existing strategy of continued organic growth in current markets with a focus on the US and Asia. EQT will also support acquisitive expansion within the highly fragmented foods coloring market by utilizing the Natural Colors platform for industry consolidation. Moreover, EQT plans to invest significantly in the company’s organization and strengthen its digital infrastructure, sustainability capabilities and supply chain setup. Natural Colors is expected to leverage on EQT’s inhouse expertise within digitalization and sustainability, and EQT’s global advisory network, which possesses significant experience from developing strong ingredient companies.