Pitch Best Small Cap Deal 2020: Synergia Capital Partners – For Ever Bulbs

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Involved firms and advisors 

Involved firms and advisors buy side:
JSA Tax (Tax Advisory), SINCERIUS (Financial Due Diligence), Lexence (Legal Advisory Corporate M&A), Synergia Capital Partners (PE Management)

Involved firms and advisors target:
Oaklins Netherlands (M&A Advisory), DLA Piper (Legal Advisory Corporate M&A) 

Involved firms and advisors sell side:
n.a.

Pitch

Brief description deal / Deal outline
Dutch private equity firm Synergia Capital Partners has acquired a majority stake in the Dutch company For Ever Bulbs, the global industry leader in gladiolus breeding. With this investment, For Ever Bulbs is able to continue its strong growth of recent years and further strengthen its position and portfolio. 

Why should this deal win the Award for Best Deal 2020?
This deal was a perfect example of what it takes to complete a deal in the most challenging times, combined with a complex pre-deal structuring, keeping four families at the sell side aligned during a controlled sale process, in a private equity set-up and in an industry (bulbs and cut-flowers) that was particularly heavily impacted by the Covid-pandemic 

Context of the deal: Four families having been involved in breeding during 5 generations decided to take the next step and invite private equity to step in their combined gladiolus business to take things to the next level. Four families that felt responsible for preserving a legacy and maintaining a global market leading position in gladiolus breeding. An industry that is far from standard in itself, given the nature of the business and seasonality aspects. At the sell side, the advisers and families involved did a perfect job in aligning the selling families and conducting a complex restructuring (roughly 20 entities were involved in the pre-deal structuring) of effectively 4 stand alone family businesses that – combined- formed the business of For Ever Bulbs. Getting that structuring done was an achievement in itself. 

Deal process: As a consequence of the complex structuring (and involvement) of 4 family businesses, the due diligence and also the sale process was far from standard. Essentially, the target business was the result of various contributions, mergers, carve-outs and transfers of (parts of businesses) put into a completely new corporate structure. Part of that structuring completed post-signing of the SPA with final steps being completed even post closing of the transaction itself. This required advisers at the end of Synergia being able to become involved in the pre-deal structuring, completely remodel and check the business case, deal with numerous tax, legal, valuation and accounting aspects that rival complex large cap transactions. This deal could only come to a signing stage with multidisciplinary teams at both ends working in sync, keeping an open mind towards getting it done. Essentially great teamwork and keeping a constant eye on the bigger picture. 

And then Covid kicked in, with a deal up for consummation but in the flower industry that was particularly heavily impacted due to its dependency on aviation and transport in a truly global environment that depends on perfect logistics. 

Because the selling families and Synergia Capital Partners, backed by their advisers kept their heads down during the entire process, they were able to get a deal that was ridiculously complex for a mid-cap deal in itself, completed at the peak of the Covid Pandemic in and industry that was hit particularly hard. This transaction was a perfect example of how important a great deal process can create alignment between the deal teams and consequently an atmosphere that allows a deal to complete under the most difficult circumstances.

Deal rationale:
For Ever Bulbs already achieved becoming global market leader in gladiolus breeding. The nature of the business and having 4 families involved in the business, created the momentum and demand for a new controlling shareholder stepping in. Attracting fresh money to support further growth through further professionalizing the management team, increased focus on R&D and onboarding expertise to roll-out a buy and build on the back of its number one position was considered an essential step in an industry (flowers) that thrives on the economy of scale and perfect logistics. 

What is the impact of this deal for the company?
Onboarding Synergia Capital Partners as controlling shareholder allows the management team to focus on further professionalization of the organization and a transition phase to a broader leadership team. This partner has now been found in Synergia Capital Partners.

What is the impact of this deal for the direct stakeholders?
The deal is structured such that all families continue to be involved in the business in full alignment with Synergia Capital Partners, while having been able to capitalize on their achievements to date. The direct stakeholders and Synergia Capital Partners take pride in being able to continue a great legacy and best of class breeding business in further expanding its global leading position for generations to come. 

What is the impact of this deal on society?
With this transaction, the Netherlands maintains a creative and innovative world leading player in gladiolus breeding, a player that is an example of the Dutch flourishing floricultural business, of the unique and forefront runner position that the Netherlands has in the floriculture and of Dutch successful entrepreneurship. 

The company will continue to attract the brightest and most talented people in the gladiolus breeding market and will continue to serve its clients all over the world from the Netherlands. 

And although the Nijmeegse Vierdaagse could not be as eventful this year, this global event is uniquely linked to Gladiolen. Being able to secure a Dutch link to those beautiful flowers bears relevance in itself. 

What was most complex about this deal?
The aspect of 4! family business being involved in the deal, the complex structuring that was needed to facilitate a deal and eventually closing the transaction during April in a time the cut flower industry was hit heavily due to the CoVid-pandemic were all ingredients that made the process of getting there incredibly complex. Also, the bulbs breeding industry is far from standard, and required a lot of the deal teams at both ends.

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