Delphy Groep has decided to terminate the merging process with Canadian company AgriFORCE Growing Systems. AgriFORCE, a publicly traded company, gained attention in the international horticulture sector over the past year due to a series of intended investments. Delphy Groep will no longer be a part of this journey.
The acquisition by AgriFORCE, announced in February 2022, initially stated that the Dutch greenhouse research and consultancy firm Delphy would continue to operate independently, with plans to establish a research facility in North America upon completion. Last month, the parties announced that they would need additional time until the end of July to finalize the administrative details of the acquisition.
However, the shareholders of Delphy Group have concluded that the collaboration would not achieve what was expected. “The strengthening of Delphy ’25 strategy has always been leading in this merging process. We come to the conclusion that merging with AgriFORCE does not contribute enough to further develop our strategy”, says CEO Delphy Group BV Jacco van der Wekken. Delphy 25 is the strategic program that provides a five-year direction for the company.
“Delphy Groep has shown consistent growth in the market over the past years with excellent financial results. In doing so, we created a solid foundation for the continued development of Delphy Groep, with or without merging with external partners."
Jacco van der Wekken
The Canadian company AgriFORCE has attracted attention within the horticulture industry through a series of intended acquisitions. Last year, shortly after the announcement of the Delphy acquisition, AgriFORCE also revealed its intention to acquire the Belgian propagation company Deroose. "We can now capture the whole value chain, from young plants to the consumer," said AgriFORCE CEO Ingo Mueller at the time. "Our goal is to unlock the value of plants and food systems."
In September, the construction of a horticultural campus and a cultivation project in Barbados were announced, but due to financial reasons, these plans have been withdrawn. "We are focusing on projects that are expected to generate positive cash flow in the short term and reduce our operating costs and future investment obligations," the company stated. In January, they announced their intention to acquire the US soft fruit company Berry People.
Revised purchase price
Ingo Mueller, CEO of AgriFORCE commented, "Although we are disappointed to end our efforts to acquire the Delphy Group BV, it was the prudent decision following an extensive due diligence process. Importantly, we have a very rigorous process for conducting M&A, which we believe highlights our strict standards and discipline." He adds the mutual decision to end the sales and purchase agreement was reached after a process including evaluation of current market conditions and projections.
"After over a year of collaboration, due diligence and involvement with Delphy in helping craft their strategic growth plans, we remain convinced in the power of knowledge and the value Delphy brings to its customers and hope to find a way to continue to work together and re-visit the collaboration at a later time. Moreover, we continue to proceed aggressively on the M&A front, where we believe there are significant opportunities to acquire undervalued, accretive and highly synergistic businesses, including but not limited to those previously announced. We look forward to providing further updates as we advance these alternative transactions, which we believe will ultimately drive much greater value for our shareholders."
Strategic Partners for Delphy
Despite this acquisition attempt has come to an end, Van der Wekken does not exclude the possibility of collaborating in the future with partners to jointly expand Delphy on the basis of the strategy.
“We foresee strong growth in the coming years. There is a huge demand worldwide for the practical knowledge that Delphy develops and implements with its partners. Consultancy, digitization, research & innovation, internationalization, training and projects play a leading role in this.“