AB Linas Agro Acquires Latvian Poultry Companies05 July 2013
LATVIA - Latvian company AB Linas Agro Group is to acquire 87 per cent of the shares in Latvian poultry company AS Putnu fabrika Kekava, all of the shares in Latvian poultry companies SIA Broileks, SIA Cerova and SIA Lielzeltini.
The transactions should be completed by December this year.
Their completion is subject to certain conditions precedent, including obtaining of permission of the Competition Council of the Republic of Latvia.
AB Linas Agro Group's financial advisors have been Porta Finance while legal advice has been provided by Raidla Lejins and Norcous.
AB Linas Agro Group estimates preliminary to spend €12.5 million for the acquisition of shares of the Latvian companies.
“AS Putnu fabrika Kekava, SIA Broileks, SIA Cerova and SIA Lielzeltini are entities operating in poultry industry. Their core activity is meat poultry and broilers breeding. We intend to acquire all the companies jointly,” said Deputy Managing Director of AB Linas Agro Group Andrius Pranckevi?ius.
“We believe that poultry farming is a growing, viable and profitable industry even though the target companies are in need of restructuring. We see the opportunity to expand and diversify our activities by adding higher value-added products.
“A vertical integration will be implemented in acquired companies – feed production, eggs hatching and raising, slaughter and meat processing. Furthermore, the activities carried out by Latvian companies have a lot of synergy with the current activities of AB Linas Agro Group.
“We sell around 1.5 million tons of grains and feedstuffs per year, will forward some of the quantities to feed production in Latvia.”
According to Andrius Pranckevi?ius, the largest of the purchased companies is a full cycle chicken meat producer AS Putnu fabrika Kekava (PFK). The company sells unprocessed chicken meat and chicken meat products. Revenue of the company reached € 33 million in 2012.
The company exports 27 per cent of its products to EU countries. During the crisis, the company’s financial performance deteriorated and as a result it is undergoing the legal protection process and restructuring which should end by January, 2014.
As a result the company is not fully using its production capacity.
SIA Lielzeltini produces chicken meat and a range of processed chicken meat products, as well as combined feed for own consumption and sale, its revenue totalled EUR 21 million in 2012 financial year.
SIA Broileks is engaged in growing and sale of live chicken with the sales revenue of EUR 1.2 million in 2012. The core activity of SIA Cerova is incubation of hatching eggs and sale of day-old chicks. The company incubated 5.9 million chicks in 2012 financial year and sales of the company amounted to € 2 million.
AB Linas Agro Group expects that in the future the acquired group of Latvian companies will generate revenue of around € 70 million.
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