Duke Street, the leading European mid-market private equity group, is to acquire COMPO, a European producer and distributor of gardening soil, fertiliser, plant protection and lawn seeds.
Headquartered in Münster, Germany, COMPO is currently owned by Kingenta Ecological Engineering Group Co Ltd (Kingenta), a publicly listed company and one of the leading fertiliser producers in China. Kingenta has owned COMPO since 2016.
COMPO is one of the market leaders across continental Europe, having established a wide range of products under the most respected and well-known brands in the industry. Its diverse product portfolio offers retailers and consumers ‘bio’ alternatives to traditional gardening product solutions, positioning COMPO ahead of its competitors in terms of sustainability. The organisation owns unrivalled production and distribution infrastructure, and has established brands that are widely familiar to distribution customers and consumers alike.
COMPO can trace its roots to the 1950s, and it has been supporting gardeners across Germany and Europe ever since. In February this year, COMPO was recognised as one of the ten strongest product brands in Germany, securing 6th place in the ‘Best Overall Brand’ category at the prestigious Best Brands Marketing Awards.
Duke Street is backing a very strong management team as it seeks to build and consolidate COMPO’s position in the industry across Europe. The team is led by Stephan Engster as CEO of COMPO, who joined the business in 2016 and has developed an exciting growth strategy for the company, which is underpinned by continuous innovation and aligns with Duke Street’s vision for the opportunities presented in the sector.
The horticulture market has shown strong signs of growth as gardening boomed throughout lockdowns and has accelerated the trend of sustainable-conscious consumers seeking eco-friendly products to tend to their gardens.
Paul Adams, Partner, Duke Street, says: “We are delighted to be partnering with management to acquire COMPO, the market leader in traditional and sustainable gardening products in continental Europe and a brand that has a clear ESG leadership position. We have seen a material increase in gardening and gardeners in recent years, with consumers embracing the broad benefits that the activity brings to their lives. We look forward to working with COMPO’s excellent management team as we implement its strategy, supported by significant investment and follow-on capital from us and our investors, that will enable the organisation to grow both organically and by acquisition across Europe.”
Stephan Engster, CEO, COMPO, says: “We at COMPO are thrilled to be partnering with Duke Street, who recognised and shared our ambition for this business. Together we are ideally positioned to build a diversified European business to better serve our customers and end-consumers. In particular, we have the right blend of experience, ability and vision to accelerate our growth by expanding our reach and providing consumers across Europe with the most extensive range of organic, sustainable and traditional products. After enjoying the support of Kingenta for a number of years, the business is poised for this exciting next stage of its evolution. Sustainability is of particular importance for Duke Street and that aligns perfectly with our careful stewardship of this business and with the growing priorities of our customers and end-consumers.”
The acquisition of COMPO follows Duke Street’s investment in Kent Pharmaceuticals and Athlone Laboratories, manufacturers and distributors of specialist generic pharmaceuticals, in 2019 and Great Rail Journeys, the world’s leading provider of escorted rail holidays, in July 2018.
The transaction builds on Duke Street’s strong record of investment in Germany, having previously acquired A-Rosa, the German premium river cruise operator, in February 2018, and Medi-Globe, the medical diagnostics and treatment manufacturer, in 2016.
Duke Street sold Wagamama in October 2018 to The Restaurant Group plc, for an enterprise value in excess of GBP550 million, generating a 3.4x money multiple for the firm.
Other successful exits by Duke Street include its investments in Baywater Healthcare (sold in 2017) and LM Funerals (sold in 2015), generating a total cash return of more than 5x and 2.6x respectively, for Duke Street and its investors.
