Organto Foods Set to Acquire Fresh Organic Choice BV
CANADA & THE NETHERLANDS - It’s no secret that the organic category continues to rise in the ranks, but we at ANUK saw a unique growth strategy come to light this week. Organic and value-added produce provider Organto Foods recently signed a Letter of Intent to acquire 100 percent of the outstanding shares of Fresh Organic Choice BV, a privately held Dutch corporation selling organic fresh-cut herbs. Closing of the transaction is subject to completion of final due diligence, definitive agreements, and acceptance of the TSX Venture Exchange.
“We are extremely excited to have Fresh Organic become part of Organto, expanding our organic fruits and vegetables portfolio and leveraging the operating platform that we have been building. Growth via acquisition has been one of our stated strategies, and we are pleased to be able to announce this first transaction as we ramp-up our acquisition program,” commented Rients van der Wal, Co-CEO of Organto and CEO of Organto Europe BV. “Wilco has built a successful business in a fast-growing category, based upon strong values and operating principles, and we are honored that he and his team will become part of Organto. By combining our collective strengths, we are confident that we will be able to profitably expand our fresh herbs and taste-maker categories for years to come. We are convinced that demand for fresh cut organic herbs will continue to grow, driven by the rise in home cooking and desire for new taste sensations, combined with the desire for the unique health benefits that herbs provide.”
Fresh Organic is based in the Netherlands and was started in 2017 by Owner Wilco Heemskerk, who will join Organto and lead the company’s organic herb and taste-maker portfolios.
The company operates an asset-light business model, which will enable a straightforward integration process with Organto. Its fresh cut packaged herbs portfolio includes mint, oregano, basil, chives, parsley, dill, thyme, rosemary, sage, tarragon, and others, sold in a wide range of branded packages. Product is sourced primarily from strategic local growers in the Netherlands, Germany, Spain, Italy, Germany, and Portugal, with sourcing programs in development Tunisia and Ethiopia.
With the increase in cooking at home during the COVID-19 pandemic, demand for fresh-cut herbs has been strong as consumers have sought the combination of taste intensity and health benefits that herbs provide. According to a press release, this trend is expected to continue as many consumers have indicated they will keep up with increased healthy home cooking once the pandemic has passed.
“I am extremely proud of what we have built at Fresh Organic and am thrilled that we will continue our legacy as part of the Organto family,” said Heemskerk. “Organto’s vision for the future, commitment to socially responsible business practices, and strategy to be a leader in fresh organic fruits and vegetables aligns with the goals of Fresh Organic, and I could not be more pleased to be part of this vision.”
Fresh Organic is expected to realize revenues of approximately CDN $2.1 million ($1.64 USD) in calendar 2020, with strong growth projected in the future. The business is expected to be both gross margin and EBITDA accretive to Organto once the transaction has closed.
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