Belgian group Greenyard has agreed to sell its horticulture arm to an investment fund for €120 million after its profits fell in the past year.
The company announced last week it would be selling assets having reached a restructuring agreement with lenders for more time to improve profitability.
Greenyard’s horticulture business is a market leader across Europe for growing media and mushroom substrates, exporting to more than 60 countries, with 14 facilities in Europe and Russia.
The acquiring company is Belgian investment fund Straco, which describes itself as active in real estate project development.
Greenyard has struggled in the past 12 months, calling it a “turbulent year”. It blamed falling sales in Belgium and Germany for a 2.4 per cent profit decline in AY 2017/18 in its Fresh division. Total sales were €4.18 billion, down by 1.7 per cent year on year.
Its horticulture business was the strongest performer, up 20.2 per cent, largely thanks to their acquisition of mushroom substrate producers Mykogen.
Greenyard CEO Hein Deprez said the sale will also secure the means to pay the maturation of a £150m retail bond next year.
“We are pleased to have reached an agreement with Straco for the divestment of our Horticulture segment. Straco shares our belief in the importance of good-quality substrates and growing media to secure sustainable and healthy fruit and vegetables in the future,” Deprez said.
“As such, we are convinced that Straco will be a good home for our Horticulture segment. Today, our focus is needed on improving profitability again and on deleveraging our balance sheet. In our two other segments (Fresh and Long Fresh), our strategy to build strong relationships with its customers remains intact.
“We feel that this divestment is an important step towards a stronger Greenyard. Furthermore, the divestment of the Horticulture segment, in combination with the agreement with the lenders and the ongoing deleveraging and improvement plans, will secure Greenyard of the necessary means for the repayment of the retail bond in the summer of next year”.
