EQT to buy Chr. Hansen’s natural colours business for 800m euros

Investment firm EQT has agreed to acquire Chr. Hansen’s natural colours division for €800 million through its EQT IX fund.

The natural colours unit produces natural colouring ingredients made from fruit and vegetable concentrates from sweet potatoes, grape skin, spirulina, carrots and beetroots.

These are primarily used within food and beverage applications, and the division reportedly serves over 1,600 customers in the industry. It is said to employ approximately 650 people and is headquartered in Hørsholm, Denmark.

Last month, Chr. Hansen announced that it aims to focus its activities on microbial science, as part of its 2025 strategy.

Mauricio Graber, CEO of Chr. Hansen, said: “The divestment of the natural colours 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.”

According to EQT, the natural colour business’ underlying market is supported by trends such as the ongoing transition from synthetic components to natural ingredients and growing demand for sustainable and plant-based food.

EQT plans to invest ‘significantly’ in its latest acquisition’s organisation, as well as strengthen the business’ digital infrastructure and supply chain setup.

The natural colours business is also expected to benefit from EQT’s ‘inhouse expertise’ within the area of sustainability and from the company’s global advisory network.

EQT will support organic growth in the natural colour producer’s existing markets and acquisitive expansion in the food colouring market.

“We are immensely proud and humble of having been chosen as the future owner of natural colours,” said Mads Ditlevsen, partner at EQT Partners, and investment advisor to EQT IX.

Natural colours fits very well with EQT’s thematic investment criteria and is operating in two of EQT IX’s five prioritised 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 the natural colours division, added: “I am very pleased to announce EQT as the new owner of Chr. Hansen’s natural colours division. EQT has acquired our great business (pending closing) to grow it organically and inorganically based on our capabilities and organisation, 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, which is subject to customary conditions and regulatory approvals, is expected to close in the first half of 2021.