According to new report by London-based corporate finance house Oghma Partners that looks at M&A across the European Food Ingredients Market 2013-2022, the trend for multiple transactions has increased significantly over the years.
Multiple expansion has largely been driven by strong strategic buyer demand, low interest rates/rising equity markets (quoted ingredient company’s valuation) and the ‘easy’ availability of capital.
Norwegian conglomerate Orkla is a case in point, being the most active and procuring 24 business within that 10 year period.
Orkla’s focus was on snapping up distributors and manufacturers of products in the bakery sector, and included Hadecoup and Vesterålen Marine Olje in 2022; Kaspar, NutraQ Cake Décor in 2021; Gortrush a year earlier; and Vamo, Confection by Design, Risberg, Zeelandia and Stelois Kanakis in 2019.
Puratos has been the 5th most active player, again focused on bakery ingredients, gaining Give Konfekture, Profimix Svijany, THT this year; Schobbers in 2021; Plange Bakery Ingredients in 2018l and Fruitapeel and Diamant Nahrungsmittel in 2017.
Reviewing activity by ingredient segment, Additives saw the most dynamic action, accounting for over 16% of deal volume, while Flavours and Fragrances came in third place – both key areas for bakery and snacks.
“Overall, therefore, the bakery and snacks sector has been one of the more active end user segments for Ingredients M&A,” Mark Lynch, partner at Oghma Partners, told BakeryandSnacks.
“There remains lots more opportunities for consolidation given the fragmented nature of the supply base.