Pitch Best Small Cap Deal 2020: Kennemervis Groep – Bobeldijk Food Group

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Involved firms and advisors 

Involved firms and advisors buy side:
Squarefield (M&A Advisory), Grant Thornton (Tax Advisory and Due Diligence), Van den Herik & Verhulst (Legal Advisory Corporate M&A), Squarefield (Debt Advisory)

Involved firms and advisors target:
HBN Law & Tax (Legal Advisory Corporate M&A)

Involved firms and advisors sell side:
HBN Law & Tax (Legal Advisory Corporate M&A)

Pitch

Brief description deal / Deal outline
BFG was looking for a strategic partner to support its high growth. For BFG, expanding capacity to be able to answer customer demand is crucial. In addition, the transaction will enable BFG to significantly accelerate growth both nationally and internationally, as it can now take advantage of KVG’s profound knowledge of and network in its sales channels.

Whilst accelerating the growth of BFG, the transaction will enable KVG to transform from a traditional seafood company to an all-around seafood and plant-based protein supplier, thus effectively responding to continuously changing consumer demand. Customers, markets and end-consumers are constantly on the move. KVG wants to respond to this optimally and sees excellent opportunities in letting BFG grow as part of Kennemervis.

Not only is the transaction beneficial for both the buyer and target, being KVG and BFG, but also for end-consumers, the environment, and animal welfare as the transaction will significantly increase the supply of seafood and plant-based products. The meat substitute market has experienced a large increase in popularity in recent years. The growing presence of flexitarians, vegetarians and vegans is driven by increased health and diet awareness as well as environmental and animal welfare concerns. However, product quality and production capacity are lacking behind, resulting in demand still exceeding supply. This transaction will increase the offering of plant-based products, which in turn will lead to increased consumption of meat substitutes benefitting the environment, animal welfare and health.

Apart from the fact that this deal is attractive for the above reasons, the transaction is also exceptional because it was closed during dynamic times, i.e. in the midst of the COVID-19 lock-down. Our client KVG closed a refinancing of its capital structure and raised additional financing for the acquisition of BFG. KVG has opted for a largely asset-based financing structure in this case. In those challenging market conditions, KVG has managed to secure a tailor-made debt structure at highly competitive terms in support of the company's long-term strategic plan providing ample room for further growth. As also discussed during one of the webinars of MenA, it was very challenging to secure financing for acquisitions during the COVID-19 lock-down, making this refinancing and acquisition even more special.

We are highly convinced that this deal should win the award due to its high complexity and its closing during uncertain times. But there is only one single reason why this deal beats the competition – it benefits humanity!

Deal rationale
– The transaction allows BFG to take advantage of KVG’s profound knowledge of, and network in its sales channels. As part of KVG, BFG will have the opportunity to significantly accelerate both national and international growth
– Customers, markets and end-consumers are constantly on the move. KVG continuously wants to respond optimally to this and sees excellent opportunities in letting BFG grow as part of its organisation.

What is the impact of this deal for the company?
Target
– Access to capital to invest in capacity to support its high growth
– Accelerate growth in its market for plant-based products supported by KVG’s commercial knowledge and network
– Boost volumes by becoming the dedicated private-label producer

Buyer
– Become an all-around strategic partner for its customers, including large retailers
– Diversification of product offering

What is the impact of this deal for the direct stakeholders?
– Customers of KVG will benefit from its expanded product offering
– Customers of BFG will benefit from its expanded capacity, enabling retailers to grow with their plants-based shelf

What is the impact of this deal on society?
The transaction will increase the offering of plant-based products, which in turn will lead to increased consumption of meat substitutes benefitting the environment, animal welfare and health

What was most complex about this deal?
– Valuing a target with an extraordinary sales growth forecast is always a challenge, especially when the market in which it operates will also experience unprecedented growth. After sophisticated analyses and long discussions, the right value was determined
– Competition to gain exclusivity and enter an one-on-one process
– Closing of the acquisition and acquisition financing during the peak of COVID-19
– Severe time pressure due to strict deadlines of external stakeholders, while the transaction itself was delayed by COVID-19 in combination with international legal complexities

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