Shares in Dutch organic group Wessanen fell in morning trade today (23 December), after the company announced that it had sold Tree of Life for a price that fell short of market expectations.

Wessanen has reached an agreement to sell its US organic unit Tree of Life to Kehe Food for a total sum of EUR119-133m (US$169-189.6m), depending on fourth quarter trading.

According to Marco Gulpers, senior equity analyst at ING Wholesale Banking, the purchase price was “in line” with ING’s expectations of EUR70-140m.

However, he added, the market was disappointed that the sale failed to live up to its generally higher expectations.

“We believe the market was expecting much more,” he told just-food following the company’s announcement.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Wessanen has indicated that the deal would allow it to reduce debt and invest more heavily in expanding its business in Europe. However, Gulpers said that the sale price achieved cast some doubt over the group’s ability to increase its investment in Europe.

“Based on net debt FY09F of c.EUR75m and EBITDA FY10 of c.EUR34m net debt/ebitda is still above 2x which limits the quest for growth in European natural & organic space,” he commented.

Wessanen shares had fallen 10.97% at 13.31 CET, dropping to EUR4.27.