Following this transaction, AB Linas Agro Group acquired a controlling stake in a total of 34 companies operating in the fields of poultry business, grain, flour, instant products production, feed and premix production, and trade in veterinary products. The companies are registered and operate in Lithuania, Latvia, Estonia, Poland, Belarus, Russia, and the Netherlands.
To finance the transaction, AB Linas Agro Group has received the syndicated loan from three banks - Luminor, Swedbank and SEB Bank. Meanwhile, a third of the transaction amount was financed using the company's resources.
"In July this year, we are celebrating the 30th anniversary of the Group, therefore, it is very symbolic that we are starting the new decade with two times stronger forces and twice as many staff. Our group of enterprises is complemented by strong companies and professional teams working in them. We aim to create and implement positive changes in agriculture and the food industry, ensure greater stability for farmers in the Baltic States and compete much more effectively in the open EU market. We are now in a period of transition, which, we believe, will be smooth and both groups, which have been competitors so far, now will work as one team“, notes Darius Zubas, the Chairman of the Board of AB Linas Agro Group.
Following this acquisition, AB Linas Agro Group becomes a vertically integrated group of agricultural and food production companies in the Baltic region, operating the entire production chain and producing products from the field to the table. The group’s projected annual revenue could reach about €1.3 billion and EBITDA of around €50-60 million. The number of employees will increase from 2,100 to 6,000. After the transaction, AB Linas Agro Group will have 76 subsidiaries.
"This merger is a big and important step, uniting two strong organizations of similar type and way of thinking. Over the decades, the KG Group has developed and grown successfully. I am grateful to the team for what we created and achieved together during that time. I believe that after joining forces of Linas Agro Group and KG Group, the work I have started will be successfully continued, while the companies will further grow stronger and, even in the conditions of active competition, will create success stories of Lithuanian products in both local and foreign markets”, says Tautvydas Barštys, the founder of KG Group.
According to D.Zubas, after the transaction, the activities of all acquired companies will be continued with the teams of employees working in them so far.
"The first step we will strive to implement in the shortest possible time is to exploit the potential for synergies by consolidating purchases and increasing export volumes. We will seek such synergies in the poultry and grain export businesses,” notes D. Zubas.
During the implementation of this acquisition, the law firm Motieka & Audzevičius represented and advised AB Linas Agro Group on legal issues and together with the lawyers of Ellex Valiūnas and Partners provided legal advice on concentration issues. One of Europe's largest economic consulting companies, Copenhagen Economics, were acquisition advisers on economic and concentration issues, while the Swedbank investment banking team provided financial advice. Financial and tax inspections of acquired companies were performed by EY specialists.
