On the front foot
Philippe Guezenec, Managing Partner of Clearwater International France, shares his views on current trends in the sector.
I have been working with clients in the F&B sector for many years, but we have seen more change in the market over the past five or six years than in the previous 20 or more.
The reason should come as little surprise. Food groups across the world are increasingly looking to manufacture simple products with only a few ingredients. They are looking to develop foods that are low in salt and sugar, and want to be offering brands that are simple, healthy and natural.
Even parts of the industry not traditionally known for promoting healthy products are in a rush to join their competitors, tearing up their recipe books and searching for new ingredients that can deliver on these objectives. What is also striking is the extent to which companies have gone on the front foot, determined to market their clean label credentials and differentiate their offering from competitors as much as possible.
As corporate finance advisers we have a key role to play in helping our clients become fully aware of these trends and to help integrate them into their business strategies. We can also share with them our experiences in other countries given that these trends are increasingly global.
In recent years, I have been involved in several transactions where these issues have been at the fore. For instance, one deal saw us advise IK Investment Partners on the acquisition of Savena, a French company which designs and produces ingredient-based functional and culinary solutions for the food industry. The company serves clients across the sector, ranging from ready-made meals and sauce producers through to meat processors and catering fi rms, precisely the types of firms that have been so affected by the move to simple, healthy products.
“Clearwater International introduced Savena to us ahead of the sales process and brought us angles on this acquisition opportunity. Savena is a typical IK Investment case thanks to its high growth potential abroad and the quality of its management team.”
Dan Soudry, Partner, IK France
A particularly notable deal was LBO France’s acquisition of the MOM Group, a market leader of stewed fruit and dessert cream sold at room temperature. One of the key objectives of the deal was to speed up MOM’s growth abroad via its GoGo squeeZ brand, and today that strategy has been completely vindicated.
At the time of the initial deal in 2010 there was a strong feeling that the brand – which contains no artificial flavours or preservatives – could travel well to the US, and so it has proved. Six years later, MOM sells more products in the US – where it now has two factories – than France, while it is also considering building a new factory in Asia too.
I had known the management team at MOM for many years prior to the deal. Looking back we definitely found the right partner for this great team at precisely the right moment, and we are now working with them to further grow the business outside the US.
MOM recently announced being in exclusive discussions with the Bel Group for the acquisition of a majority stake by the dairy group. This will enable MOM to benefit from the huge commercial network of Bel in particular in Asia where MOM intends to develop its presence.
Clearwater International advises LBO France on the acquisition of Mont Blanc Materne
MOM group is the market leader of stewed fruit and dessert cream. The group, which expects a revenue of 185m in 2010, was constituted after successive acquisitions of Mont Blanc and Materne.
In the years to follow the management will be focusing on the increase of Materne sales in France (through the development of pouches for adults), and also speeding up the development abroad (under the Gogo Squeez brand, which shows strong initial results in the U.S and Israel) thanks to the establishment of a FFS line (Form Fill Seal) for Mon 4h.
Clearwater International, led by partner, Philippe Guézenec, advised LBO France.
However, it isn’t just about helping clients in good times, our role is to be there in tougher times too. For instance, last year I was part of a team that advised sushi producer Marco Polo Foods on its sale to family-owned German competitor Natsu.
Marco Polo had found itself in a heavily indebted situation and with a business model that was struggling to respond to fast-moving consumer trends. In particular, the company manufactured all its products at a giant factory from where it supplied the whole country. But it started to come up against strong competition from supermarkets which were making their products in store and were perceived by consumers to be making ‘fresher’ fish. The subsequent deal has helped save this great business.