Private equity firm Activa Capital buys into soaring organic vegetable market
with France's Activa Capital injecting equity between €5 and €10
million in organic food firm Pro Natura.
Claiming to be the number one organic fruit and vegetable wholesaler in France, Pro Natura's annual turnover of 22 per cent clearly appealed to the Paris-based firm.
A turnover driven by annual 6 per cent growth in France for consumption figures of organic fruit and vegetables.
"Activa Capital share my desire to accelerate the growth of Pro Natura- supplying our customers with first class organic fruit and vegetables sourced from our exclusive network of preferred suppliers," says Pro Natura's CEO Henri de Pazzis.
Founded in 1987, the fresh equity injection in the organic fruit and vegetable firm, valued at between €10 and €20 million, will be used to tap into the "strong external growth opportunities within the organic food sector."
The organic fruit and vegetable market continues to dominate sales in the overall organic market. And the continued popularity of this segment contributed to a growth rate of 26 per cent for the European organic food industry between 2001 and 2004.
Datamonitor estimates that in 2004, the total market for organic food in Europe was worth €20.7 billion, while the market for fruit and vegetables came in at $5.8 billion.
The Activa Capital move is the latest investment in a string of cash investments from equity firms into the stable food industry.
Pushing M&A activity into the shadow, private equity backed the three largest European food manufacturing sector transactions last year.
From 2003 to 2004 private equity investments in Europe more than doubled in value from €1.1 billion to €2.6 billion annually: with the considerable billion euro leap attributable to just three more deals in 2004 than the previous year.
In other words, the deals are getting bigger and bigger.
Last year five private equity-backed food deals tipped the scales at more than €100 million, with the Hicks, Muse, Tate & Furst bid for cereals maker Weetabix topping the charts at €915 million.
In 2003, just three deals marched above the €100 million mark.
But slicing an easy path to the head of the pack comes French private equity firm PAI, that has just pulled a massive €1.1 billion from its treasure chest to buy Danish ingredients firm Chr Hansen.
