Private equity firm Sun European Partners has bought the flowers and vegetables business of Finlays, a tea farmer owned by the international Swire group, in a deal sources said was worth about £100 million ($154 million, €135 million).
The investment is Sun European’s first foray into sub-Saharan Africa through the Finlays Horticultures’ subsidiaries in Kenya and South Africa which control 1,950 hectares of farmland in the two countries. The deal also gives Sun European ownership of operations in Europe where 430 million flowers – mainly roses – are processed and distributed to major retailers, including Tesco in the UK and REWE in Germany.
As well as being the largest vertically-integrated flower supplier serving Europe from Africa, Finlays Horticulture also produces 7.3 million kilogrammes of vegetables a year, including asparagus and green beans, for the UK.
The majority of the flowers and vegetable business’s roughly £300 million annual revenues are generated in the UK, Sun European managing director Paul Daccus told Agri Investor. No other financial details were given and he declined to comment on the price paid.
“One of key opportunities is geographic expansion. Finlays is very strongly positioned to grow that business in Europe,” Daccus said.
Sun European – an arm of Florida-based Sun Capital – sees scope to increase revenues by 4 to 5 percent a year through investment and a clearer focus on the fruit and vegetable business. Finlays Horticulture has 162 hectares of covered flower cultivation, as well as 320 hectacres devoted to vegetable produce, at its farms in Kenya and South Africa, giving ample opportunity to expand production. The company can also increase its processing capacity at a lower cost in Africa than in Europe, Daccus said.
The sale will allow Finlays to focus principally on its tea plantations in Kenya and Sri Lanka. Finlay’s 324 hectares covered flower farm at Kericho, amid its Kenya tea plantations, is excluded from the deal but can continue to supply the horticulture business.
“We felt that it was increasingly important to focus on beverages as our core business area, rather than trying to succeed globally at both beverages and horticulture in one company,” said Finlays managing director Guy Chambers in a statement.
Finlays will also continue to own some 5,000 hectares of timber land in Kenya and 2,000 hectares of rubber plantations in Sri Lanka. Finlays is a subsidiary of John Swire, one of Britain’s largest family-owned trading businesses, with global interests spanning aviation, property and agribusiness, and a group turnover of some $29 billion in 2014.