“Investors can see the current volatility in the fruit and vegetable sector”

The number of mergers and acquisitions in the greenhouse sector is set to increase significantly this year and in the coming years. While there are many opportunities for growth, the number of private companies entering the sector is also increasing. In fact, in the Netherlands, including some of the most backward farmers in the technical sector.

This is what Frank de Heck and Felix Snow Heckmans, an orchard orchard specialists at Oaklin, tell us. Last year saw short-term mergers and acquisitions, but after a short COVID-19 shock, the market rebounded.

In the first six months of 2021, we saw a lot of activity in the market, as one of the horticulturists at the Amsterdam branch of international finance in the Netherlands. We see this as a testament to the drive for greenhouse sustainability.

By doing so, Oaklin needs to feed the growing global population, land scarcity, water scarcity, ever-increasing environmental regulations, sustainable demand, and demand for high-quality products from supermarket chains, incessantly, and as a technology innovation.

Wave waves
News of companies merging or controlling each other immediately followed in the early months of this year. Then he returned to normal during the summer and the companies were harassing each other, often announcing the takeover.

Many gardening technology players in particular are on the move. They want every way to stay competitive in the growing world market. Although farmers continue to grow both domestically and internationally, investment parties are still buying greenhouses or complete works from their colleagues without interference. But in North America, for example, you can see many investment companies collaborating with gardeners.

Felix explains that investments, investments and investors are often in turmoil. Because those who take the lead will rejuvenate everyone in the market and make them think of taking action. The result is that after that it is busy again and there is a lot of discussion.

Even in the middle of summer this year. “You can still see some uncertainty about VV. Parties want to complete transactions and want to continue discussions, but it is quiet in the summer. In addition, despite the presence of international parties, they have finally been able to move easily. This will continue or not next harvest. And the banks are open to new customers, not last year. This means that many people feel that it is time to move on.

Sales climate
That final statement may seem to have full control over the purchasing body. However, that is far from the truth, says Felix. “We are seeing an attractive retail climate right now. That is because there is a lot of money in the market at low interest rates and it is easy to raise funds, so many investment companies have what we call ‘dry flour’, that is, their ‘wallets’ are full and parties want to invest that money in gardening.

Now, horticulture is traditionally an unchanging sector. And it still is. But while those investors are reluctant to invest in horticulture, that is a thing of the past. “Investment companies can now see a little flexibility. They have an eye on the horizon and want to grow with companies.

The investment parties have knocked on the door of farmers and technology companies. However, these days have a last resort and many investment demands are not born out of obligation but out of obligation. In our experience, therefore, companies do not simply say “yes” to the initial supply. We find that companies often come to us for advice and to help us choose a partner. Fear of perfection is often not the right thing to do. There are still many investors who are shaking companies that are not doing well, which is a big change among other employees. Nowadays, however, the role of support for companies that often see multiple parties continues to dominate.

Investing in the environment for agriculture and technology
Oaklins expects the largest global growth in high-tech greenhouse gardening. Frank De Heck, head of the horticulture team in the rest of the world and in the Netherlands, says: “Although low-tech is contributing significantly to global market growth, high-tech greenhouses are ultimately reaping great benefits. If you look at those who are pushing the growth trend, they will not be able to grow anywhere in the development institutions using the most modern techniques.

However, more expensive technology comes with larger investments. This is one of the reasons why wealthy parties outside the sector enter the market. Felix: “Such parties have the financial strength to make companies invest. They see that these investments will eventually pay off. After all, there is a growing demand for local food. And relatively new crops such as cannabis, soft fruits and salads. Growing up on the water, investors see a margin. Approximately 62% of the world’s greenhouses are used for this purpose, but 38% of ornamental plants also benefit from the growth trend.

Frank is a real player who can work or work outside of existing high-growth markets. Felix added: “We are talking about geotechnical markets because gardeners want to be local. In this way, they want to benefit from the potential growth of fruit and vegetable production in more independent countries.

That is why many Dutch market players are now considering setting up local sales offices. Or about making (small) purchases from overseas companies. Sometimes they need financial strength and therefore investments or partners to help them take new steps. Following the example of the past in the world of horticulture, we expect that this technology will soon increase.

When do farmers follow?
Oaklin closely monitors the growth of more than 70 offices around the world in 45 countries. They also report on this a few times a year, for example, on early gardening in 2019 and this spring on gardening technology. The growth in the technology market in particular raises the question of whether manufacturers will follow through with mergers, acquisitions and attracting investors and investments. Felix expects them to wait, but it remains to be seen whether they will be working at the same speed with gardening technology.

Farmers who want to grow can expand, buy greenhouses from their colleagues, or take over an entire company. What a company needs varies greatly. It is always a matter of making a good return or weighing it in with the business. Strategy. In fact, you can see that an investor is working directly with Vision on the horizon, along with the farmers on the board. When it comes to growth, farmers have a much easier time than other sectors. Glass houses.

At present, at least in the Netherlands, in Belgium and sometimes in Europe, farmers are often “relying” on the purchases of investment parties, often because they are still very dependent on one or more numbers. People in their business, Felix notes. “The investment party wants sustainability and if a company is largely dependent on it in this case it is a risk if it is a producer. The same applies to gardening technology parties. That market is also divided here.

The growth mentioned earlier in the market means that with each new discovery, companies are asking themselves what they can do again. That desire is not always to take, merge or attract an investment party. However, there is no harm in expecting the future of a company’s management framework to grow with the market. Felix: “That always strengthens a company. But if a company is still dependent on an owner, it is not a contractor for investors. You will see that good deals need to be made to ensure sustainability in the first few years after you invest or buy. . “

External influences
There is also the threat of a lack of control, as well as the influence of major financial powers in the sector on Dutch horticulture. Are these parties gradually taking over the sector?

Felix does not see this happening. Many Dutch companies that take action still prefer to use Dutch investment companies. Just because a cup of coffee is easy to drive to their headquarters. But of course we, many international parties, are very active, and sometimes they think of technical knowledge in areas such as the automotive industry more than the money they bring in. So foreign investors are not necessarily ‘bad’ for Dutch gardening. Although many Dutch companies do not yet exist, they are large and therefore easy for investors to grasp.

For more information –
Felix Snow Henkemans
Frank de Heck
Beethovenstra 500
1082 PR Amsterdam

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