‘All our deals were done at fair multiples’
Leon Breed, director of Nederlandse MKB Maatschappij (NMP), is confident his private equity firm will weather the economic crisis. ‘Our sensible course is now paying off.’
‘Buying a company is a bit like buying a house’, says Leon Breed, director of NMP, a Dutch private equity firm with a focus on SME. ‘The feeling is the same. It usually only takes one visit to know if a property is right for you.’
This was the case when Breed was first shown around Bel Impex, an importer of exotic vegetables, spices and fruit based in the Dutch province of South Holland, by its owner Elke Oudendijk. Breed immediately liked what he saw and heard. ‘It is crucial that you are on the same page as the management of an investment target. Like us, Bel Impex is pragmatic and practically minded. They are financially solid and extremely lean and mean, which means they can adjust easily to changing market conditions.’
Socially responsible entrepreneurship
Bel Impex was founded in 1992. They import fresh produce such as coconuts, cassava and ginger from the Dominican Republic, Costa Rica, Honduras and Thailand. Recently, the company started importing from South Africa and Mexico as well. Its products are sold in Dutch supermarkets under the brand label of Belicious.
Bel Impex (revenue: 10 million euro) attaches great value to sustainability and socially responsible entrepreneurship. It prefers to work with suppliers that are certified by the Global Partnership for Good Agricultural Practice (GAP). If a supplier does not yet meet the standards of the certificate, Bel Impex will help them make the required adjustments.
Bel Impex was acquired by NMP in June 2019. The Dutch investment company that celebrates it’s 4-year anniversary this August, has equity participations in ten firms, organised in the verticals e- commerce, IT, media & entertainment and wholesale. Bel Impex is its first venture into the agrifood sector. But it won’t be the last, Breed guarantees. ‘We aim for a buy-and-build strategy. One of our co-investors has a background as an executive in the dairy industry. He will be heading our new vertical. His involvement and expertise makes it easier for us to take this step.’
Corporate finance specialist Friso Kuipers, partner with AenF Partners BV, represented the owner of Bel Impex. Next to contacting the usual strategic parties, Kuipers also placed the proposition on the Dealsuite platform to ensure a wide range of interested parties. In this case, one of the first to respond was Leon Breed, familiar to Kuipers. ‘We’ve done business on previous occasions, but we didn’t know they were also interested in investing in the agrifood sector.’
The deal was closed quickly. There was a match and both parties reached an agreement shortly after. There are few things Breed enjoys more than the ‘flow’ of a good deal, he says. ‘That feeling you get when a plan really comes together. The opposite is also true: if the negations are laborious and slow, it is probably not going to work out. You are either in it together or not at all.’
No bank financing
According to Breed, NMP never relies on bank financing, except for working capital, which enables it to move swiftly. Independency from bank capital is one of the founding principles of his firm, Breed explains. ‘Over the past few years, we saw the business cycle edge towards a peak. It was only a matter of time before it would take a downward turn. Covid-19 sped up and exacerbated this process, but it did not come as a total surprise.’
Breed is confident that his firm can withstand the current economic turmoil. ‘I feel that we have steered a sensible course that is now paying off. Without exception, all our acquisitions were done at fair multiples. We are also in the lucky position to have the liquidity in place to weather disruptions.’
‘Of course business will not continue as usual’, Breed concedes. ‘We are ready to support our companies if necessary. It’s not hard to run a company when the economy is booming, but it is in times like these that your portfolio management really makes a difference.’