A Sustainable and Green Future for OMR Moerdijk Biomass Fermentation Plant

From Humble Leftovers to Cutting-edge Renewable Energy Creation

Our client BNM Holding BV’s origins date back to the 50’s-60’s, when Van Benten Ophaaldienst, a farmer with just three pigs at the time, began collecting leftover food to feed his livestock who in turn, provided fertilizer. Fast forward several years and Bewa (Van Benten Waddinxveen) had become a thriving business, which besides leftover food, now also collected fats, which were melted down into animal feed.

During the 90’s, H.F. van Benten, son of the company founder, became CEO of Bewa. Deciding to leave the Agricultural sector and with a vision to move the company in a new direction, he sold over 1,000 of the company’s pigs and used the funds to build a biomass fermentation plant in the industrial area of Moerdijk and hence OMR (Organic Material Recycling) Moerdijk was established.

Using organic materials (food waste), OMR Moerdijk now generates biogas which is used as fuel for its two power stations, generating heat and power. Over the years, the installations and business model have been continuously innovated and optimized to become fully circular, with the objective of reducing the amount of residual product. A water purification plant has also been built on-site. Today, the only residual products are non-recyclable materials, mainly plastic wrappings. All other materials are processed into energy, fertilizer, and water.

“I see the biomass fermentation plant very much like a pig’s stomach: digesting the food, which then becomes fertilizer.”

H.F van Benten

Handing Over the Reins of the Company

HF van Benten came to us as a referral from a former client, Renes Recycling, which recycles primarily paper & cardboard, plastic, fresh products ("AGF"), and business waste. Like many of our clients who run family-owned businesses that have been carefully nurtured and developed over the years, he was looking to retire from the daily operations yet wanted to ensure the company's legacy. Therefore, finding the right buyer was crucial. His objective was that we find him a buyer that understood the processes involved and would be able to ensure the future success of the business.

Determining the Appropriate Buyer for the Business

Having closed several transactions and financings in the recycling sector, we have considerable experience, contacts, and access to both international as well as national buyers. We approached a limited number of strategic buyers (around 20), including companies in Ireland and the UK, all focusing on Environmental, Social, and Governance (ESG) and with knowledge of organic waste. OMR Moerdijk's circular business model is unique, whereby food residues are processed into sustainable energy, so potential buyers were interested not only in the plant itself but also the opportunity to use its technology for other existing plants or greenfield projects.

Following a competitive process, during which we received bids from several international players, Perpetual Next, a climate technology company in the Netherlands, was selected as the best fit. Due to it being a relatively small market, the buyer and seller already knew each other. Perpetual Next had considerable knowledge regarding organic waste conversion and understood the business and its potential, which was reflected in their valuation. The company has three divisions: Technologies, Conversions (where OMR Moerdijk now resides), and Trading. It recycles a wide range of local organic residual waste, reducing the use of raw fossil materials and enabling large-polluting industries to go green, thus contributing to achieving the international climate objectives.

Securing the Optimal Valuation

While OMR Moerdijk was attractive to buyers that were familiar with the processes, the plant itself had been developed and optimized over the years by our client in such a way that it is unique. This made it relatively difficult to assess the installations without prior knowledge of biomass plants.

Furthermore, it operates two combined heat and power stations (CHPs) for which subsidies were granted for a limited period only. Currently, a substantial portion of income is generated through these subsidies, therefore, many interested parties struggled to evaluate the business following the end of the subsidies. Our objective was to demonstrate the business's future potential, and our buyer not only saw the value potential but believed in the company's long-term and underlying driver of securing green energy, gas, and electricity.

Overcoming the Obstacles Along the way

The M&A process began back in 2018, while our client was waiting to receive all the required permits to operate the plant. These were expected to be granted in the summer of 2019, but in fact didn’t come through until the summer of 2021, which slowed down the process significantly. At the same time, COVID also had a knock-on effect on our client’s business, as less swill, or unpacked catering waste, was coming in from the hospitality industry which was hit heavily by the pandemic. Recent events in Ukraine have also resulted in highly volatile energy prices, so there were many challenges faced by our client along the way. However, we had trust in the underlying market and the fact that in the long-term we are moving toward a circular world/economy.

A Sustainable and Green Future for OMR Moerdijk

Following the sale of OMR Moerdijk, H.F. van Benten will step down from the daily operations and will hold an advisory role, in which he can continue to share his knowledge and expertise of biomass fermentation plants to not only improve the current plant and build new plants, but also help Perpetual Next to improve and grow existing businesses. Perpetual Next’s next objective is to upgrade biogas to green gas and replace fossil natural gas, as well as to upgrade organic residual and/or waste flows.

"I am convinced that we have found a suitable buyer, Perpetual Next, and that OMR Moerdijk's future is secured. My experience cooperating with the IMAP team has been very pleasant. We all had to have a lot of patience during this process, but thanks to the continuous good cooperation with all parties, we were able to achieve a good result."

ESG Reporting a Driving Force in M&A Activity

New regulations and legislative proposals relating to ESG reporting and responsible business conduct will require companies to focus more heavily on ESG. We see an increasing number of institutions that require ESG reporting measures for their investment companies and public companies. Not only this, but both buyers and sellers are becoming more aware of the impact of ESG factors on the company's long-term value.

This increased emphasis on ESG is also driving M&A activity and has shown to have a positive impact on shareholder value of businesses involved in ESG-related activities. In addition, strategic premiums partially explain the higher multiples paid for companies with strong ESG scores, which is a means for buyers to strengthen their positioning and reputation through the acquisition of targets with a strong score.