Chr. Hansen picferrous bisglycinate mode of actionked EQT to take over its Natural Colors business, saying it had “the highest dedication to the future development of it.” The private equity firm, while not in the ingredients space, has expertise investing in businesses in industrial technology that generate growth. It plans to support an acquisitive expansion strategy to consolidate the natural food colorings space under Natural Colors, which is already a market leader. The PE firm could then chose to sell the division or take the company public once it’s able to increase its scale and boost efficiencies.For the fiscal year spanning 2018/19, Chr. Hansen’s Natural Colors business unit had more than 1,600 customers and sales of $250 million. Other competitors in the space include Diana Food North America, part of Germany’s Symrise Group, which debuted organic, sustainably sourced colors last year, and Netherlands-based GNT Group, a company that debuted a high-intensity blue food coloring made from spirulina, a blue-green algae. Natural colors, whileeuro fer ferrous fumarate popular with consumers, pose a myriad of problems for manufacturers. Using plant-based ingredients mpercentage of iron in ferrous bisglycinateakes it more difficult to make a crayon-box varietyaction of ferrous fumarate of vibrant shades, which has led some companies, such as General Mills, to revert back to artificially-flavored options. Nevertheless, Big Food continues to invest heavily in a space that Zion Market Research projects will top $1.77 billion by 2021 — an annual growth rate of nearly 5.2% from 2016 to 2021.Despite the projected growth in the segment, Chr. Hansen is not the only company to divest its natural colors unit. DuPont previously divested its own natural colors business to privathuốc ferrous fumaratete equity firm DDW in 2019, indicating that natural colorings remain a difficult category to make profitable and successful in today’s market.With this divestment, “Chr. Hansen can now focus on fulfilling the ambition of becoming a pure-play, microbial and fermentation company,” CEO Mauricio Graber said in the release. Focusing on fermentation was the theme behind the company’s 2025 strategic plan that it debuted in August. According to Chr. Hansen, this focus aligns with global trends such as a growing world population, demographic shifts, increasing health awareness and a focus on climate change.Shedding the Natural Colors business to invest in fermentation also is a lucrative move for the company. While its natural colors business has struggled recently after a sustained period of growth, the company’s food cultures and enzymes business grew 8% during the quarter and its health and nutrition segment jumped 12%.
Chr. Hansen to sell its natural colors business to PE group for $940M
