AB Linas Agro Group receives a syndicated loan from three banks for the acquisition of KG Group
Linas Agro Group, agro-food, food production and international trade company, is borrowis lying funds from Luminor, Swedbank and SEB banks. The syndicated loan will be used to finance the acquisition of companies of the KG Group, and will be allowed under permission to execute said acquisition issued by the Lithuanian Competition Council.
AB Linas Agro Group entered into a share purchase agreement regarding the acquisition of majority stake of AB Kauno Grūdai, AB Kaišiadorių Paukštynas, AB Vilniaus Paukštynas and related companies on October 1 of last year. Permits have already been obtained from the competition authorities of Latvia, Estonia, Poland and Russia. The decision of the Lithuanian Competition Council on the implementation of the concentration is expected in July.
“We have been cooperating with the three banks for a number of years, and they are well aware of the specificities of the food and agrifood business, as well as the growth potential of our group of companies. The previous successful cooperation and mutual trust will allow us to take a big step forward in expanding the scope, areas and geography of our activities, ”said Mažvydas Šileika, CFO of Linas Agro Group.
The amount of the syndicated loan is not disclosed, as it would reveal the value of the transaction, which would be contrary to the agreement between the sellers of the KG Group companies and the buyer on the confidentiality of the transaction.
According to Mr Šileika, about a third of the transaction amount is expected to be equity financed, and the amount of the loan syndicated by the banks will represent 70% of the value of the transaction. At this time, Linas Agro Group is unable to disclose any further information on the agreement with the banks.
The experts of the banks financing the operation consider the planned acquisition as a positive impetus for the development of agricultural and food production companies and their competitiveness on international markets.
“This is an important transaction across the country: the merger of two major market players operating in overlapping markets, both of which are groups of vertically integrated and managed food and agriculture companies. A lot of success. We appreciate the confidence of Linas Agro Group in the choice of SEB Bank as principal agent in the transaction concerning this exceptional investment. The company has successfully developed the local and international trade in agricultural products so far; therefore, this acquisition will allow the group of companies to significantly expand its business in the Baltic States, Poland, as well as the Scandinavian markets and other markets in Eastern and Western Europe. The granting of the syndicated loan to finance this acquisition proves that the local banks are ready to finance the business development of Lithuanian companies on the basis of international best practices and successful mutual cooperation ”, says Vilius Juzikis, member of the board of administration and head of the Corporate Banking division. at Banque SEB.
Jonas Urbonas, Head of Corporate Banking at Luminor Bank, notes that there are important transactions and there are systemic transactions that change the entire business environment. “In my opinion, Linas Agro is preparing to lead the latter, so we are very happy to be a part of this process. The process will result in the creation of a champion of the integrated agricultural and food production sector of the Baltic States, which will become an even stronger competitor in the international market. Based on our observations, competition in the aforementioned industries has transcended national borders for some time and takes place regionally, so the ability to offer a wide range of products will promote establishment and growth in the market. all over Europe, ”says J. Urbonas.
“As a long-term financial partner of Linas Agro Group, we are happy not only to help finance this transaction but also to advise our client on matters relating to the acquisition of the KG group. We believe this transaction will help the client to become a leading company in the region and give it a competitive advantage in export markets ”, says Antanas Sagatauskas, Head of Corporate Banking Division at Swedbank in Lithuania.
About the AB Linas Agro Group
AB Linas Agro Group and its subsidiaries are a group of companies established in 1991 and operating in four countries: Lithuania, Latvia, Estonia and Ukraine. More than 2,100 employees work with group companies. The Group’s consolidated sales for the 2019/2020 financial year amounted to 658 million euros.
The group companies are engaged in the production and trading of agricultural raw materials and food products, as well as the provision of goods and services to farmers. The group has its own network of grain elevators consisting of thirteen such installations and is one of the largest exporters of Lithuanian and Latvian cereals. It is also one of the leaders in Lithuania in the field of supplying goods to farmers (certified seeds, fertilizers and agricultural machinery), as well as a seed preparation factory. In addition, the group owns seven agricultural enterprises in Lithuania and is a large producer of milk. In Latvia, the group has four poultry companies: AS Putnu Fabrika Kekava, CIA Lielzeltini, SIA Broileks and SIA Cerova.
Formore information contact:
Financial Director at AB Linas Agro Group
Phone. +370 619 19 403
Email [email protected]