Kingenta successfully sold the Compo Consumer Business to Duke Street
Client
Kingenta Ecological Engineering Group Co., Ltd. (“Kingenta Group”)
Kingenta Group was established in 1998. The company is devoted to the R&D, production and marketing of specialty fertilizers including compound fertilizers (CF), slow/controlled-release fertilizers (SCRF), water soluble fertilizer (WSF) and other advanced solutions. It owns the biggest production base for SCRF worldwide. The company currently has total assets of 18 billion CNY and more than 7,000 employees with an annual production capacity of 8 million tons. Kingenta Group was listed on the Shenzhen Stock Exchange in 2010 (SHE: 002470). The company generated sales of 9.35 billion CNY in 2020.
Project Outline
· Buyer: mertus 738.GmbH, of which the major shareholder is Duke Street LLP. Duke Street LLP is a British private equity firm which focuses on investing in mature, mid-market European businesses. Since the foundation in 1994, Duke Street has already invested in more than 50 companies through 5 funds with the total investment amount exceeding 2.5 billion EUR. Currently, Duke Street has 600 million EUR assets under management.
· Seller: Kingenta Investco GmbH, a wholly owned subsidiary of Kingenta Ecological Engineering Group Co., Ltd.
· Target: 100% of the shares in 23 companies including Compo Holding GmbH, COMPO Polska sp.z.o.o., Estramil Investments S.L., Colada Italy S.r.l., COMPO Jardin AG, COMPO Benelux N.V., COMPO France S.A.S. and the subsidiaries of these 7 companies as well as 49% of the shares in Shanghai Compo Gardening Co., Ltd. Established in 1956, COMPO Consumer is headquartered in Münster, Germany and has a history of more than 60 years. The company is recognized as the most high-end supplier of horticultural fertilizers and plant protection products in Europe where it has the largest market share of any company engaging in similar business. The company has an international team of 600 employees and its products are used in more than 100 countries around the world. Its high-quality potting soil, plant care, lawn and gardening fertilizers, lawn seeds, plant protection products and other products required for indoor and outdoor gardening are all well-known high-end gardening products in Europe and around the world. In total the company sells over 15,000 different products. The revenue of the company exceeded 300 million euros in 2020.
· Our Contribution: Successful support throughout the whole M&A process as exclusive sell-side advisor, including the coordination of the bidding process and supporting the client in negotiations with multiple European and American strategic investors as well as financial investors. Throughout the transaction Eurasian benefitted from its rich experience and network advantages. In addition, Eurasian Consulting also assisted the client with finding financing solutions in response to the financing needs of COMPO Consumer during the transaction.
· Loan Agreement signed on December 12th, 2019
· Share Purchase Agreement signed on June 1st, 2021
· Closing on July 30th, 2021
Highlights
· The Target, COMPO Consumer, is the No.1 brand in the field of home gardening products in Europe and has an excellent reputation worldwide.
· Throughout the project, Eurasian Consulting assisted the client in identifying financing risks and actively supported the client in finding financing solutions. Eurasian successfully screened for and selected the final lender through Eurasian’s own network, which helped the client to avoid any financing risks of the Target and ensured the smooth proceeding of the M&A transaction.
· Despite unfavorable factors such as the COVID-19 pandemic and financing risk, Eurasian still achieved maximal positive returns on investment for the client.
· The successful sale of COMPO Consumer greatly eased the financial pressure on the domestic client, which will create good conditions for the restructuring of Kingenta Group.
