Belgium-based fresh, frozen, and prepared fruit and vegetable company Greenyard has agreed to divest its horticulture business to Belgium private equity group Straco for EUR120 million (US$141 million).

Operating in 27 countries around the world, Greenyard’s decision to divest its horticulture unit, including its Greenyard Mycoculture business, has been made as a step toward deleveraging its balance sheet prior to the repayment of a EUR150 million retail bond set to mature in July of 2019, according to a company statement.

“Today, our focus is needed on improving profitability again and on deleveraging our balance sheet,” said Hein Deprez, CEO, Greenyard. “In our two other segments (Fresh and Long Fresh), our strategy to build strong relationships with its customers remains intact. We remain keen on cooperating with growers and retailers to develop with them new concepts that create value for all parties in the chain.”

The horticulture business in question is active in the production of media and mushroom substrates, and includes 14 facilities across Europe and Russia through which it exports its products to more than 60 countries.

“We are pleased to have reached an agreement with Straco for the divestment of our Horticulture segment,” said Deprez.  “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. As such, we are convinced that Straco will be a good home for our Horticulture segment.”

Focusing on Benelux, the UK, France, Germany, and Poland, Straco is an independent, family-owned investment firm that takes a longer view toward its investment decisions, and plans to invest in the growth potential of the Greenyard horticulture business, which saw a notable jump in sales of 35 percent to EUR34.4 million (US$40 million) in the first half of this year, due in part to its integration of Mycoculture.

“This reorientation towards our Fresh and Long Fresh segments will allow more focused management’s attention and a faster implementation of impactful operational improvement actions for internal profitable growth,” said Depres. “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.”

-Lynda Kiernan