Pitch Best Deal 2021: Duravant – Foodmate
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De beste deal van het jaar is meer dan het hoogste cijfertje in de krant en de kunst van het dealmaken is meer dan het opstellen van een contract. De Awards voor de beste deal zou dus niet alleen op de prijs van de deal gebaseerd moeten zijn, maar vooral op de – toegevoegde – waarde voor een bedrijf en de exit.
Name of the deal: Foodmate acquired by Duravant, a Warburg Pincus company
Date: 17-04-2021
Published value: >500 million (€)
Buyer(s): Duravant
Target: Foodmate
Seller: Foodmate shareholders
Involved firms and advisors buy side:
De Brauw Blackstone Westbroek (Legal Advisory Corporate/M&A and Tax Advisory), Cleary Gottlieb Steen & Hamilton (Legal Advisory Corporate/M&A), PwC (Financial Due Diligence and Tax Advisory)
Involved firms and advisors target:
William Blair (M&A Advisory), AKD (Legal Advisory Corporate/M&A), King & Spalding (Legal Advisory Corporate/M&A), Mazars (Tax Advisory), Grant Thornton (Financial Due Diligence)
Involved firms and advisors sell side:
William Blair (M&A Advisory), AKD (Legal Advisory Corporate/M&A), King & Spalding (Legal Advisory Corporate/M&A), Mazars (Tax Advisory), Grant Thornton (Financial Due Diligence)
Pitch
Brief description deal / Deal outline
Foodmate, a Dutch family-owned, leading global manufacturer of poultry processing equipment headquartered in Numansdorp, the Netherlands was acquired by Duravant, a global engineered equipment and automation solutions provider to the food processing, packaging, and material handling sectors.
Why should this deal win the Award for Best Deal 2021?
The acquisition of Foodmate by Duravant / Warburg Pincus should win the award for Best Deal 2021 because the deal:
- Represents a great success story for the Dutch family who founded Foodmate in the Netherlands 15 years ago and expanded it from scratch into a market leader in the global poultry processing equipment market by strategically expanding the company’s innovative technology, distribution network, and global manufacturing and assembly footprint;
- Provides the family shareholders of Foodmate with a partner with a shared vision and culture to support the company’s future growth while retaining a high degree of autonomy;
- Creates liquidity for the family shareholders at an optimal value and facilitates an ownership transition;
- Combines two world-class food processing technology companies, positioning the combined company for future global growth;
- Highlights the increasing global importance of automation and technology across all industrial applications;
- Helps to address a major societal challenge by making healthier protein available at more affordable prices amid growing global demand; and
- Illustrates excellence in deal-making, including the value of cross-border M&A expertise in a virtual environment and deep relationships with global trade buyers.
The acquisition of Foodmate by Duravant is an exceptional success story for a Dutch family-owned business. The deal represents the culmination of 15 years of hard work for Foodmate’s Dutch founding family, whose company built the most technologically advanced poultry processing equipment in the world and strategically expanded its footprint from the Netherlands to Europe, North America, and beyond. Selling the company to Duravant not only guaranteed a continuation of the successful growth story but also enabled a significant liquidity event and succession planning for the founders. The acquisition immediately positions Duravant, a portfolio company of Warburg Pincus, as a global leader in poultry processing.
It enables the company to grow further as food producers seek to meet the world’s increasing demand for high-quality, affordable protein. Adding Foodmate’s poultry processing technology to Duravant’s already robust food processing platform will allow Duravant to continue to innovate, expand its international reach, and deepen relationships with its growing base of global customers. The acquisition highlights the increasing importance of technology and automation across all industrial applications, including food processing.
From a societal perspective, the combined company will help meet the world’s growing demand for healthier and more affordable sources of protein, which has broadly increased as the global middle class has grown since the 1960s. This is critical for developing regions where demand for healthy protein is especially high. In addition, effective utilization of industrial technology and automation is essential in the food industry today when considering the global supply chain disruptions that have occurred during the Covid-19 pandemic.
Deal rationale:
The family shareholders of Foodmate sought a partner with a shared vision and culture to support the company’s future growth while retaining a high degree of autonomy for Foodmate. The shareholders also sought to create liquidity at an optimal value and affect a transition of ownership. Warburg Pincus, Duravant’s private equity backer, realized that Duravant lacked a leading position in protein processing equipment and would benefit from acquiring a technology platform that would significantly increase its poultry processing capabilities. Foodmate’s automated systems enable poultry processors to make optimal cuts of protein and maximize yield. The company’s proprietary technology allows for extremely rapid portioning and deboning. For example, a complete Foodmate system can facilitate the processing of up to 12,000 chicken legs per hour. Because Duravant’s customer base, which includes major food producers, is highly focused on throughput, yield, and agility, Foodmate’s technology solutions were highly attractive. Following prior industry consolidation (including the acquisition of Dutch-owned Meyn Holding BV by CTB/Berkshire Hathaway in2012), Foodmate was the only remaining poultry processing company of scale that would match Duravant’s processing capacity and strategic goals. While Foodmate’s processing systems are already in use in the US, Europe, and Asia, this strategic acquisition allows Duravant to expand its operations and increase global market share.
What is the impact of this deal on the company?
Foodmate becomes part of a larger industrial technology platform with the resources to continue investing in technology and expand its capabilities to achieve long-term growth across global markets while retaining a high degree of autonomy. Foodmate has been consistently growth-oriented over its 15-year history, so the prospect of increasing the company’s international presence was essential. The deal allowed Foodmate to execute a well-structured succession plan, which was critical to the founding family, who wanted to maintain a role in the company while transitioning ownership and creating liquidity.
What is the impact of this deal on the direct stakeholders?
From the seller’s perspective, the deal allowed Foodmate to find a long-term partner with a shared vision and culture to support the company’s future growth while retaining a high degree of autonomy. The deal also allowed the shareholders to maximize the value of the equity that the founding family had built over the past 15 years. In addition, it allowed the shareholders of Foodmate to facilitate succession while maintaining a direct role in the company.
From the buyer’s perspective, the acquisition of Foodmate strengthened and diversified Warburg Pincus’ investment platform in the attractive and profitable food processing sector and enhanced the exit profile and size of the Duravant group. Adding Foodmate’s poultry processing solutions to Duravant’s already robust food processing platform allows Duravant to continue to innovate, expand its international reach, and deepen relationships with its growing base of global customers.
What is the impact of this deal on society?
Duravant’s acquisition of Foodmate addresses a major societal challenge: how to meet the world’s growing need for healthier, more affordable protein. As the global middle class has expanded since the 1960s, protein demand has steadily increased, particularly in developing regions including Asia, Latin America, and Africa.
Combining Foodmate’s leading poultry processing technology with the larger Duravant platform will increase poultry processing speed and yield, reduce waste, and lower costs. Ultimately, this will help poultry producers to provide healthy protein to a wider group of global consumers as efficiently as possible.
What was most complex about this deal?
The cross-border nature of the deal required an international team in order to prepare the process, conduct discussions with buyers, coordinate due diligence and negotiate, and finalize the transaction. The entire transaction, including marketing, management meetings and presentations, due diligence sessions, site visits, and deal and transaction negotiations with international buyers, was conducted in a 100% virtual environment as a result of Covid-19-related travel restrictions.
