• The deal strengthens Denmark’s Chr. Olesen in the US market
• It gives Lalilab access to a broader range of ingredients from outside the US

Chr. Olesen Group, a fifth-generation Danish family-owned ingredients distributor, has completed the successful merger of its US subsidiary with Lalilab, Inc. of North Carolina. This transaction represents Chr. Olesen was first in the US and was arranged by the ingredients sector M&A advisor ThinkingLinking.

Bruno Baudet, President at Lalilab, Inc., said, “With this merger, Chr. Olesen Group will expand its footprint in the U.S. market, while Lalilab will enrich its product portfolio with a broader range of food and pharma-related products.”

Chr. Olesen stated, “Chr. Olesen Group has merged its FOOD activities in the US with the esteemed US family owned company Lalilab, Durham, NC. This important step marks a new and expanded era for both Lalilab and Chr. Olesen Group.”

Mark Dixon, Chief Thinking Officer at ThinkingLinking, commented: “The deal brings together two family-owned businesses with a strong history of ingredients distribution in Europe and the US.”

Mr. Dixon spoke about how the deal fits into the wider context of ingredients M&A trends, “The natural ingredients sector has been following a macro trend toward becoming a single global market, where proprietary natural ingredients sourced and produced in one geography can reach B2B customers throughout the world. This is hardly surprising given the broadly homogeneous demands for end products from human beings across the world. Historically, the barriers to this logic, and the resulting inefficiencies, were largely legacy-based, given the relatively low cost of transporting concentrated ingredients.

“The result of this globalisation is simple. It has meant that the best ingredients have been reaching B2B customers, and have enjoyed fast revenue growth, proportionately even higher profits growth, along with top valuations. By contrast, ingredients with inferior efficacy or attributes have been less able to survive due to reduced protection in their national markets and have seen their profits squeezed and valuations plummet.

“This trend has mostly been realised through a vast volume of cross-border M&A deals between ingredients players at the producer level rather than by organic growth. M&A has given companies the immediate advantages of cross-border sourcing and cross-selling of products to their respective, generally non-overlapping customer bases. It was a no-brainer, and almost everyone was trying to do it.

“It seemed like an unstoppable trend until the fluidity of supply chains suffered a setback, first due to the COVID epidemic and, more recently, because of US tariffs imposed by the Trump administration that affected most of the world’s non-US ingredients producers.”

“Cross-border distribution mergers are yet another way to streamline the global market, and they also secure supply chains through multi-location ingredients inventories. Cross-border distribution consolidation provides no less benefit to the B2B customers in nutraceuticals, pharma, cosmetics, food, and animal health. Like consolidation at the producer level, distribution consolidation positions the global player at a significant advantage versus single-nation players.”

“ThinkingLinking is pleased to have completed another cross-border deal in the sector, in this case by identifying Lalilab on behalf of Chr. Olesen, introducing the parties and then negotiating and structuring the successful transaction.”

PwC assisted in financial due diligence, while law firms Gunnercooke in the US and Moalem Weitemeyer in Denmark provided legal advice.

Chr. Olesen A/S

Chr. Olesen A/S, a family-owned company established in 1885 in Denmark, specialises in distributing high-quality ingredients for the feed, food, pharmaceutical and technical industries worldwide, and also manufactures active pharmaceutical ingredients (APIs) and intermediates.

Its headquarters is based in Gentofte, Denmark, and it has subsidiaries in Europe, Latin America, Mexico, and the USA.

Lalilab Inc.

LALILAB, Inc., a family-owned North Carolina corporation, specialises in the sourcing of high-quality raw materials for the pharmaceutical, nutraceutical, and food industries. The sourcing of innovative products is a critical function in Lalilab’s operations. Its unique product list reflects its dedication to discovering sources for new ingredients. Under non-disclosure and exclusive agreements, Lalilab has a unique, global network of ingredient manufacturers, enabling it to find the special compounds required by its customers.

ThinkingLinking

ThinkingLinking, with representatives in London, New York, Copenhagen, Paris, Milan, as well as Poland and Ukraine, advises on M&A transactions in the natural ingredients sector globally.

The firm’s emphasis is on identifying opportunities with maximum synergy to deliver the optimal transaction for each client. ThinkingLinking expands the range of opportunities for clients and builds 1-on-1 relationships to explore the degree of strategic fit, which in turn leads to transactions with higher value for the partners. The firm operates globally with the exception that is committed to not doing business with Russian entities on either side of a transaction.