Primaflor, a family-owned vegetables producer from Spain, is interested in a merger, Managing Director Eduardo Cordoba told Mergermarket.

The company, which is based in Pulpi in the region of Andalucia, would be interested in analysing a merger or an integration, Cordoba said. The company has hired an advisor – a big four firm – and has already identified possible partners, he added. It will start talks with them in the short term, he added.

Primafor would be interested in teaming up with another family-owned vegetable producer which could complement its products and produce synergies in procurement, production resources and personnel, the executive said. The ideal partner would be one with a focus on exports and a product with high production during the summer, when Primaflor’s production is lower, he added.

Primaflor aims to generate EUR 400m in revenues within five years, and a merger or integration would help to achieve that figure, Cordoba said. “The sector needs size – if you are bigger is easier to negotiate with clients,” he added.

Primaflor hit EUR 202m in revenues last year (its fiscal year runs to the end of June) with a 10% EBITDA margin, Cordoba said. Around 55% of its revenues come from exports, he added.

Meanwhile, the company does not rule out acquisitions during the process of looking for a partner, Cordoba said. Indeed, the company is nearly to close an acquisition of 75% stake in a Spanish company with around EUR 40m in revenues, he added. Primaflor is working with Manuel Jodar Asesores for due diligence and legal issues, he added. He declined to provide more details.

The company will finance this acquisition with bank loans, Cordoba said. The company has a 1.1x financial debt/EBITDA ratio, he added.

Private equity firms are continuously calling to the company, Cordoba said, as agri-food sector is hot. But Primaflor’s owners are not interested in a sale, he added.

Primaflor, which was founded almost 50 years ago, is owned by Lorenzo Belmonte (47%), the Peregrin family (47%) and the Martinez Caparros family (6%), the executive said.

Primaflor’s main products are different types of lettuces. The company exports to 25 countries in Europe and manages 6,700 hectares of crop land, Cordoba said.

The company sells fresh products and also ready-to-eat products, the executive said. It has six facilities in Spain, four of ready-to-eat products, one for fresh products and a sixth one for peeled garlic, he said. The peeled garlic is sold to hotels, restaurants and cafeterias (HORECA), he added.