06 May 2020
AMSTERDAM, Netherlands: Dutch gladiolus breeder For Ever announced this week that it has secured an investment from Synergia Capital Partners. The funds from Synergia Capital Partners will support For Ever’s growth aspirations to expand its global market presence.
For Ever was established in 1998 when three gladiolus breeders brought their genetics into one company. The merger aimed to create economies of scale, which has resulted in the current world market leader in gladiolus breeding.
For Ever stands out in the marketplace for its unique varieties that are sold to customers around the world. For Ever cultivars are available in wide range of colours and colour combinations with blooms that may be frilled, ruffled, semi ruffled or plain.
For Ever’s management team identifies several opportunities to further strengthen and expand the company. For the realisation of these plans, there was a strong preference to do this together with an experienced partner who could provide added value in realising the growth plan and could support the professionalisation of the organization and the transition phase to a broader leadership team. This partner has now been found in Synergia Capital Partners.
Oaklins served as exclusive M&A advisor to the shareholders of For Ever. While COVID-19 causes delays in several merger and acquisition processes, Frank de Hek, head of Oaklins’ horticulture team, continues to see strong interest for companies that have a solid position in an attractive market segment.
The process of finding a new partner was intense, but exciting. For Ever boss Theo van Aanholt says, “We have explored various options and we are convinced that we have made the right choice by welcoming Synergia as a new shareholder. We can now take advantage of Synergia’s vast experience in building strong agriculture companies, with Ploeger Oxbo and Pokon Naturado as prime examples.”
He continues, “In addition, we can leverage their network of successful entrepreneurs that invest in Synergia to expand our global sales market. Eduard Paarlberg, Gert-Jan Paarlberg and myself are looking forward to take For Ever, together with Synergia, to the next level.”
Paul van den Heuvel, Investment Director on behalf of Synergia Capital Partners says: “We are very impressed by For Ever because of its unique gladiolus genetics and the global market leadership that has been achieved in recent years. The distinctive character and added value for which For Ever has excellent opportunities for further growth and we look forward to supporting Theo and the team in this. We are excited to welcome For Ever as first investment in our recently raised fifth fund.”
In mid-2019, For Ever’s shareholders decided to execute a legal restructuring in order to rationalise the operations and shareholders structure. The reason for such legal restructuring was to make the operations more efficient, align the interest of all shareholders and safeguard the continuity of the company. Oaklins, together with law firm DLA Piper, assisted the shareholders in realising this legal restructuring.
Parallel to the legal restructuring, an analyses was made of the changing ornamental breeding landscape, the drivers behind it and the position of For Ever within it. With the assistance of Oaklins, For Ever subsequently explored multiple strategic options. After a competitive sale process managed by Oaklins, Synergia was chosen as the preferred partner.
The flower bulb market is broad and diverse. Some highlighted market characteristics and drivers:
General floriculture market growth – The global floriculture market is expected to accelerate with a compounded annual growth rate of close to 4% during 2018 – 2027, especially in emerging markets due to the improvement of flower distribution and increase in welfare.
Breeding cycle – In the flower bulbs market, the breeding cycle of developing new varieties is relatively long (i.e. more than 10 years). This is due to a low multiplication rate and hence it takes years to be able to produce commercial quantities. It increases the entry barriers for new breeding entrants.
Breeding rights – After extensive testing and if breeders expect a long lifetime of a new variety, varieties are registered at Community Plant Variety Office to obtain intellectual property protection, a so-called plant breeding right.
Niche variety – From a competition perspective, two different markets are visible in the flower bulbs market: main varieties (e.g. tulips and lilies) and niche varieties (e.g. narcissi and gladioli). In the main variety segments, higher competitive pressure is noticed due to the larger amount of players. A niche segment is often less competitive and fragmented with regard to breeding. It is often dominated by a few market players that have significant lead over others and potential entrants.
Sustainability – Sustainability is an important concern for the flower bulb sector. In the last years, the environmental impact of the flower bulb sector is reduced by 80%. Furthermore, mass retailers are demanding higher and higher requirements with respect to sustainability standards. It is therefore expected that several flower species may disappear from the shelf in the future as they cannot meet these sustainability standards.
Breeding outside – Breeding and propagation of bulbs mainly take place outside, which makes it a less capital-intensive business compared to other floriculture crops.
Modern bouquets – Modern bouquets and seasonal flowers are becoming increasingly popular. These bouquets increasingly used by flower e-tailers such as Bloomon is a very good example.
Other market dynamics – Other changing dynamics include a decreasing trend in dry sale due to ageing: the younger generation is less interested in gardening. Additionally, more and more sales of flowers and bulbs are generated via the mass retail channel (supermarkets, e-commerce) instead of specialized florists.
Oaklins stresses that For Ever scores well on those drivers and is therefore well positioned to gain market share.