A new industry company with recognizable products and people is starting to form.
Bayer announced March 10 it entered a definitive agreement to sell its Environmental Science business for $2.6 billion to London-based private equity firm Cinven. News of the sale became public a little less than 13 months after Bayer started the process of divesting its Environmental Science business, which serves the production ornamentals, golf, lawn and landscape, pest control, and vegetation management markets.
Pending proper approvals, the transaction is expected to close in the second half of this year. A portfolio of market-leading products and 800 employees will transfer to the company emerging from Environmental Science. And, yes, the company will eventually have a new name.
“All of our solutions — you name it — they all stay the same,” Bayer Environmental Science CEO Gilles Galliou said in an interview with Greenhouse Management’s sister publication Golf Course Industry. “We will have a transition period with Bayer, because obviously you can’t switch one name to another. All the regulatory requirements are needed and we need to transfer a lot of ownership to the new company. It’s our ambition to have a name that fits our innovative spirit and our sustainability thinking, so we’re working hard to find that new corporate identity.”
Think naming a product is tough? Imagine naming an entire company. The regulatory process for naming the new company could take as long as two years, although Galliou said he expects the new name to be launched sooner. In the meantime, the same products will be available through the same channels. “My No. 1 goal is to make sure right out of the gate there will be no issues for our customers,” Galliou said. “Business continuity is my No. 1 goal.”
The company will be uniquely positioned because it will no longer be tied to the agriculture business. With Bayer, Environmental Science served as a division under the Crop Science unit.Environmental Science contributed more than $700 million to Bayer in 2021, according to Galliou, and numerous markets within the division are flourishing, he adds.
“We had a very strong performance year after year in 2020 over 2019 and 2021 over 2020,” Galliou said. “We see the momentum in these markets. We saw the momentum, in particular, in North America. A big part of our current business is in North America. We see the opportunity to grow. It’s the right time to focus on those markets.”
The company will be North America-based, with the Environmental Science headquarters in Cary, North Carolina, becoming the new company’s global headquarters. The transaction also includes the Environmental Science research facility in Clayton, North Carolina.
Galliou, a Bayer veteran who has spent nearly his entire tenure in Environmental Science, will lead the new company, which will expand to 1,000 employees because new positions are required to handle central functions. Galliou has already endured one major challenge: guiding the Environmental Science team through the uncertainty of the process.
“I cannot state how grateful and amazed I am by the commitment, the passion, the hard work, the will to succeed, the excitement and the positive thinking the team has shown,” he said. “It’s been an incredible work experience. You learn every day about stuff that you have never done before.” Galliou added that, beyond normal attrition, the company has retained “nearly all of our talent” during the past year.
Cinven’s purchase of Environmental Science represents one of the biggest infusions of private equity investment to enter the golf maintenance industry. Cinven, according to its website, has more than 130 investments in six sectors: business services, consumer, financial services, healthcare, industrials and TMT (technology, media and telecommunications). The firm has offices in London, New York, Frankfurt, Paris, Milan, Madrid, Guernsey and Luxembourg.
“Their experience is a lot in acquiring one division of a big company and turning it into an independent company,” Galliou said. “We are going to build on that experience, because that’s exactly what we need. More than that, I believe Cinven has shown the capacity to drive companies to success. They also have very openly expressed wanting to do good for society and the environment. We are totally aligned on those elements.”
The companies are also aligned on the importance of innovation. Once the transition period passes, expect new products from the company with a new name.
“Cinven is extremely excited about our capacity to innovate,” Galliou said. “Our product portfolio has tremendous value. It’s an extremely strong product line. If we don’t supplement and add to our innovation for years to come, the value of that portfolio is good for, what, five, 10 years? The investment is very clear about our growth, therefore innovation is at the center of what we are going to do.”