For Ever attracts partner to accelerate its growth path
For Ever, the global market leader in gladiolus breeding, has entered into a strategic partnership with Synergia Capital Partners. With this investment, the company wants to continue the strong growth of recent years. 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.
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. Breeding is the process of developing and producing new plant species. For Ever has unique gladiolus varieties that are appreciated by its customers all over the world. On the back of its number one position, For Ever is well positioned to benefit from the current market dynamics and increase its market share.
In order to take advantage of these opportunities in the coming years, the For Ever management has identified several opportunities to further strengthen and expand the company. For the realization of these plans, there was a strong preference to do this together with an experienced partner who could provide added value in realizing the growth plan and could support the professionalization of the organization and the transition phase to a broader leadership team. This partner has now been found in Synergia Capital Partners.
The process of finding a new partner was intense, but exciting. 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.Theo van Aanholt, Director of For Ever
Theo van Aanholt 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.”
Background of the transaction and our role
In mid-2019, For Ever’s shareholders decided to execute a legal restructuring in order to rationalize 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 realizing 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.
With Oaklins’ extensive network in the horticulture sector, we were able to swiftly get in touch with a large range of potential partners that could have high added value. After speaking to several of them, we could take a very well educated decision on what exactly we were looking for. Although the bulb breeding sector is a very particular one, Oaklins was with its sector knowledge quickly up to speed which made the process smooth. We are very satisfied with their advice and the outcome.Theo van Aanholt, Director of For Ever
Market dynamics
The flower bulb market is quite 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.
For Ever scores well on those drivers and is therefore well positioned to gain market share.
- For Ever operates in a niche segment which has multiple advantages compared to a more mainstream segment such as less competitive pressure.
- For Ever’s years of experience have resulted in an impressive genetics product portfolio of circa 150 own commercial varieties. The major share of these varieties are protected by plant breeding rights or by exclusive propagation and growing.
- For Ever’s competitors take approximately 15 years to launch a new variety whereas For Ever takes circa 10 years. Therefore, it is unlikely that For Ever will ever lose its market leading position.
- For Ever’s products meet the highest required sustainability standards. For Ever recently took samples from flowers that are sent to customers to test for prohibited substances. No prohibited substances were found and the sample was well below the sustainability standard set by mass retailers.
- The cut gladiolus perfectly fits in the modern bouquet.
M&A Activity
The global M&A activity within the floriculture industry is growing over the last years. Important drivers are the further professionalization of the sector, increasing knowledge base, pressure from large retailers, succession issues as well as the increasing appetite from investors.
Horticulture related transactions
On the back of these trends, we expect the M&A activity to further increase in the years to come. Although the consolidation in the flower bulb segment is slightly lagging behind on other ornamental segments, a number of the transactions already took place.
Highlighted transactions
Related transactions
Oaklins has been involved in a large number of merger & acquisition transactions in the horticulture sector. Other transactions, among many others, include Greenyard Flowers UK, Microflor, Citygreen, Floranova, Pokon Naturado, Bakker.com, Olij Rozen, and Dümmen Orange. Based on these deals, our senior M&A professionals have an extensive network and deep understanding of the horticulture sector. With our support, the shareholders of For Ever were able to position the company as a very attractive investment opportunity and introduce For Ever to the most relevant buyers. Adding For Ever to our track record gives us even more knowledge of the horticulture sector, especially within the bulb segment.
Related horticulture reports
Oaklins has a strong record of thought-leadership. Through white papers, industry events and analyst reports, Oaklins moves the discussion forward on the topics that matter most to our clients. We give sellers and buyers a sense of context and perspective which guides their strategic decision making. Oaklins’ horticulture specialists regularly publish newsletters about merger and acquisition developments in the industry.
For expert commentary in the agriculture and/or horticulture sector, you can download our sector reports.
Deal team
Our specialists in the horticulture segment make a difference for clients by taking a global view and leveraging our deep local connections. Oaklins' team in the Netherlands represented the shareholders of For Ever. The transaction team consisted of Frank de Hek, Casper Oude Essink and Daphne van der Bilt.
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