Pitch Best MidCap Deal 2021: Orkla – New York Pizza

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Name of the deal: Orkla acquires majority of shares in New York Pizza 
Date announced: 28-06-2021 
Date closed: 04-08-2021  
Published value: 145 Million (€) 
Buyer(s): Orkla Asa 
Target: New York Pizza Management  
Seller: Founders, including Mr Philippe Vorst (CEO) 

Involved firms and advisors buy side: 
Houthoff (Legal Advisory Corporate/M&A), Deloitte (Financial Due Diligence and Tax Advisory), Roland Berger (commercial Due Diligence),  
Involved firms and advisor's target: 
AXECO Corporate Finance (M&A advisory), Florent (Legal Advisory Corporate/M&A), BUREN (Legal Advisory Corporate M&A), KPMG (Financial Due Diligence)
Involved firms and advisors sell side: 
AXECO Corporate Finance (M&A advisory), Florent (Legal Advisory Corporate/M&A), BUREN (Legal Advisory Corporate M&A), KPMG (Financial Due Diligence)


Brief description deal / Deal outline 
Orkla, a leading supplier of branded consumer goods and concept solutions to the consumer, out-of-home and bakery markets in the Nordics, Baltics and selected markets in Central Europe and India, has entered into an agreement to purchase 75% of the shares in New York Pizza, one of the leading pizza chains in the Netherlands. The current shareholders will continue to have an ownership of 25%. 
Why should this deal win the Award for Best Deal MidCap 2021? 
New York Pizza is one of the leading pizza chains in the Netherlands, at the time of the transaction operating 232 franchisee operated sales outlets, of which 229 in the Netherlands and a growing international presence in Belgium and Germany. In addition, the New York Pizza Group is a pizza dough manufacturer through subsidiary Euro Pizza Products, which also purchases and distributes other pizza ingredients and condiments to sales outlets. The high-quality pizza dough is exported to customers in 18 European countries. The largest external customer is Kotipizza, the Orkla-owned and leading Finnish pizza chain. With the investment by Orkla, Orkla has brought together New York Pizza and Kotipizza to realise its strategic ambition of growing in the Out-of-Home segment. Orkla will support New York Pizza in realizing the company’s international growth potential to become a leading European pizza chain and strengthening both New York Pizza and Kotipizza through close collaboration. 
Deal rationale: 
New York Pizza is strongly positioned in the Netherlands as one of the leading (quick service) pizza chains, and at the time of transaction was at the start of executing on its international growth potential. The company was looking for a reputable strategic partner to continue its growth in the Benelux and to support the envisaged international expansion. Orkla would provide support to New York Pizza in realizing this international growth potential through its broad experience in the consumer goods sector as well as in executing on M&A opportunities. The strength of the deal rationale is highlighted by the recent announcements of the acquisitions of three pizza chains (Stückwerk, Flying Pizza and Pizza Planet; in total 105 outlets) in Germany since the announcement of the transaction between Sellers and Orkla. 
What is the impact of this deal on the company? 
As highlighted above, the deal has already had substantial impact for the company with the successful execution of three acquisitions in Germany, increasing the number of sales outlets from 232 to 342 (including continuing organic growth). Through these acquisitions, New York Pizza is on the way to becoming one of the leading pizza chains in Germany. 
What is the impact of this deal on the direct stakeholders? 
Orkla has broad experience in the consumer goods sector and is also the owner of one of New York Pizza’s peers, Kotipizza. For both companies, this will spur the sharing of knowledge and best practices to further develop their respective brands in different regions, as well as increase the room to invest in innovation, e-commerce and service. For consumers, this will bring an even better experience, and, in addition, will trigger innovation in the German market through improved e-commerce and technology as well as high quality ingredients and dough.  
What is the impact of this deal on society? 
Internationally, the market dynamics for the fast food and quick service restaurant sector are driving strong growth as consumer preferences are shifting towards quality and convenience, with pizza remaining the take-away food of choice. New York Pizza has shown that it is a category-defining company in the Netherlands with high quality ingredients and dough, as well as a growing offering of healthy, vegetarian and vegan meals, and a superior customer experience through its state-of-the-art e-commerce systems. With its international expansion, New York Pizza will significantly improve the experience of consumers and increase the quality and healthiness of their food. 
What was most complex about this deal? 
New York Pizza has an ambitious international growth plan for both its pizza chain, as well as for Euro Pizza Products, the dough manufacturer which is part of the New York Pizza group. As such, in its assessment of the transaction, Orkla had to get comfortable not just on the Benelux business, but on additional markets for international expansion as well, including the company’s projections for such plans. In the deal process, this was also a key parameter in agreeing on a valuation in view of the growth potential of the company. Furthermore, the discussions surrounding the rights and obligations of the Sellers in view of their continuing 25% stake in the company proved to be intricate. 

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