The acquisition of Mydibel by Clarebout: “An M&A potato deal with nothing but winners”

Image: Marc Wallican

Mega-deal in the potato industry: Assisted by the Belgian-Dutch Corporate Finance team of ING, the Mylle family and the Walloon investment company Wallone Entreprende sell the fry company Mydibel to the West Flemish counterpart Clarebout. The latter manages to outshine major international multinationals in a true potato war. Mydibel CEO Marc van Herreweghe explains.

‘Home of the Potato,’ reads the sign at the entrance of the extensive Mydibel complex just outside Moeskroen, on the border of West Flanders and France. ‘Room Bintje’ adorns the door of the large meeting room on the ground floor of the headquarters. Crystal clear; here, in the far south of Belgium, fryers are working overtime, and everything and everyone breathes potato.

“This is a beautiful family business”, welcomes the CEO, Marc van Herreweghe. “Founded in 1988 by Roger Mylle together with his sons, already a legend in his lifetime. In 2009, his sons Bruno and Carlo took over the reins from him. And in the night from Thursday, December 22, to Friday, December 23 of last year, the acquisition by Clarebout Group was signed.”

An acquisition that was not predicted or expected by everyone. Because Mydibel is globally considered one of the crown jewels in the highly consolidating industry. A crown jewel squarely in the sights and spotlights of the world players in the potato industry. Including the Canadian giant McCain and the almost equally large American Lamb Weston. But in the end, the Flemish entrepreneur Jan Clarebout walked away with the loot. Belgian media reported that more than 400 million euros were paid for 100 percent of the Mydibel shares – owned by the brothers Bruno and Carlo Mylle (80.8 percent) and the Walloon public investor Wallonie Entreprende (19.2 percent).

The Clarebout/Mydibel combination creates a player that will play a prominent role in the world market. “With this deal, we are taking another step in the implementation of our long-term growth strategy,” says CEO Marc van Herreweghe. “With Clarebout as the new owner, we have a reliable partner for a successful future for Mydibel and our 800 employees.”

‘Securing a place on the world stage’

Van Herreweghe has been serving as Group CEO for almost six years. He was the first ‘external’ operational manager of Mydibel, not coming from the Mylle family. “I was appointed in 2017 to further expand the company, to prepare Mydibel for the next generation,” he says. Under his leadership, the family business became one of the most sought-after suppliers of potato products worldwide.

His vision of ‘sustainable entrepreneurship, putting the customer first, zero waste, and servant leadership’ resulted in investments in the latest technologies and the development of innovative products. Van Herreweghe was never hesitant to also contribute to this industry sector at the Belgian level: chairman of Belgapom, board member of the European Potato Processors’ Association (EUPPA). And thus, putting Mydibel on the world map.

In the end, the shareholders of Mydibel chose to enter the acquisition process. To secure the place the family business holds on the world stage for the coming years. Everyone at Mydibel is full of praise for the path that was mapped out for them by the advisory Belgian and Dutch Corporate Finance Teams of ING. “On the recommendation of Michael van Eenoo, Head of Corporate Finance ING Belgium, and Marco Gulpers, ING Corporate Finance Netherlands, we chose the auction concept,” explains CEO Van Herreweghe. “For about six months, I spoke with Michael and Marco more often than with my wife. Do not underestimate the number of changes and emotions – for the owners, but also for our 800 employees – involved in the sale of a family business. From ING and the shareholders, there was 100 percent commitment to go for that auction process. The best option to achieve the capital injection the company envisions.”

‘Choosing the other Belgian fry king’

About ten candidates entered the takeover race. In the end, a shortlist of three major players remained. McCain (revenue 6.66 billion euros) and Lamb Weston (revenue 4.14 billion euros) were considered to have excellent chances by analysts. But at the end of the long journey, the shareholders chose the considerably smaller Clarebout Group with a revenue of over 1 billion euros. Just like Mydibel, it is also a Belgian fry king, also located in West Flanders, and also a close and traditional family business.

“We produce the same products, we see each other more as colleagues than as competitors,” says Mydibel CEO Marc Van Herreweghe about the new partner. “The beauty of an auction is that as the selling party, you ultimately feel you’ve been able to secure the best deal. ING is the largest investment bank in Belgium and handles many transactions in the food industry. Mydibel will continue to exist as a name, the same goes for our employees and our two locations here in Moeskroen. This is the second-largest deal in Belgium in 2022 in terms of size. In addition to ING, we worked with Stibbe, PwC, and Titeca as advisors.”

Buyer Jan Clarebout started his company in the same year as Roger Mylle, 35 years ago. He started with the trade of fresh potatoes and later focused on processing them into various frozen potato products, ranging from frozen fries to potato flakes and specialties. Like Mydibel, Clarebout is strongly export-oriented and distributes to more than 120 countries worldwide, with the operational focus in Europe. The new combination counts over 2400 employees.

‘All those colleagues share in the story’

“We have been very clear and open towards our colleagues, except for the confidential initial negotiations; we continuously shared them in the story,” says Marc Van Herreweghe. “This has created a positive atmosphere; there has been no reduction in our production at any time. Of course, this deal was also very emotional for the family. Bruno and Carlo Mylle were fully committed for 35 years; they said goodbye to their child with this acquisition, shedding quite a few tears. That’s why, after the decision to sell, it was an absolute must for them to find the right candidate at the right price. Even though you can’t put a price on the emotional aspect.”

When reaching ‘that right price,’ the three remaining candidates were not very far apart in their bids. Ultimately, it was mainly a loyalty job towards the Mylle family and the Walloon investment company Wallonie Entreprendre, which entered in 2019, that would prove decisive for the choice of the acquiring party.

“Because Belgian and also a family business,” explains the CEO of Mydibel. “Family businesses understand each other better; large foreign organizations do not always know what is happening in Belgium, asking different questions. In an acquisition, you seek that synergy. At the same time, the blue-collar activities in the company just continue. Now that the deal is done, we can realize our growth plans. Ensure additional capacity by building installations. We already have the permits for that. Consolidation in this industry does not stop. Everyone wants, everyone must grow. And with all that, we need more, not fewer employees in our new combination. There is a job here for everyone.”

Tackling the monster task together with the CFO

Although Marc Van Herreweghe is extremely modest, his role – as well as that of CFO Stijn Vandendriessche – during the negotiations should certainly not be underestimated. It was a 24/7 job for members of the executive committee for many months. “I am enormously grateful to Stijn!”

The CEO could rely on a wealth of experience during that monster task. Both in terms of operational management in difficult times and in M&A processes. Before entering the potato industry, he worked for over 22 years in the service of the mega multinational British American Tobacco. Van Herreweghe was active in more than forty countries, with secondments in Russia, Switzerland, Germany, Poland, Romania, the United Kingdom, Indonesia, the United States, South Africa, Bangladesh, among others. He was involved in a long series of acquisitions. For example, the acquisition of Rothmans International by British American Tobacco in 1999, where he contributed to the integration of both multinationals.

About the M&A strategy followed in all those different countries: “A Brazilian is not a Swiss. And Germans work according to clear and well-defined processes. They want to be prepared for everything. In France, on the other hand, you are never really ready; new discussions arise there every time. But over all those years of multicultural work, you become culturally richer in the end. At Mydibel, people from twenty different nationalities work. I always say; if you make an effort to understand the culture, you also understand much better why someone reacts in a certain way.”

‘I give people that ‘do it’ mandate’

About his way of achieving value creation: “Sustainability, people, innovations. That’s what it’s all about. That’s also what’s so beautiful about Mydibel. We are almost 100 percent self-supporting in terms of energy, produce our own electricity by fermenting potato peels and making biogas from them. In addition, we use everything from that potato; we have no waste streams. I have been standing here for six years at the service of my colleagues; I call that ‘servant leadership.’ A coach, with 61 years of life experience, giving people opportunities to make mistakes and grow as a result. Inform, engage, empower. Giving that ‘do it’ mandate!”

Where CEO Marc Van Herreweghe thinks Mydibel should be in a year: “I hope that the buyer has achieved the integration and synergy he had in mind. After all, he paid a hefty price, and that money needs to be earned back. Furthermore, I hope that all employees who have the best interests of this company at heart have a safe feeling. That they can continue to build their careers sustainably. Choosing here means choosing for continuity. I certainly haven’t made any plans for retirement yet. My wife wouldn’t allow that…”

Returning to the deal, to that acquisition by Clarebout Group: “The buyer is happy to have Mydibel; further investments will follow. With the acquisition of Mydibel, the Clarebout Group becomes a family giant on the big potato world stage. Everyone wins, no one loses. How beautiful can it be in M&A?”

PERSONAL
Job Title: Group CEO Mydibel.
Age: 61.
City: Grammene (Vlaanderen).
College: Polytechniek Brussel.
Family: Married with Els, son (38), two grand children (10 and 14).
Last read book: “Good to Great” (Jim Collins, about the 30-year history of 28 companies).
Holiday: “As long as it’s with the family, quite peaceful; I’ve already traveled enough.”
Hobby, sport: Economics, cycling, walking, delving into local cultures.
Music: “Broad spectrum. As the CEO of a main sponsor, I had to delve into Richard Wagner sometimes…”
Film, series: “I can laugh a lot at ‘gendarme’ Louis de Funès. I love older films, for example, the early James Bond series.”
Car: “Well, I have a few, passionate enthusiast; I also occasionally drive on the circuit.””