On July 15th, 2021 AB "Linas Agro Group" completed one of the largest business acquisition deals in the history of Lithuania: it acquired controlling stakes in AB "Kauno grūdai," AB "Kaišiadorių paukštynas," AB "Vilniaus paukštynas," and related companies, collectively operating as "KG Group," from the shareholders. The financial details of the transaction cannot be disclosed by agreement of the parties.
Through this transaction, AB "Linas Agro Group" acquired controlling stakes in a total of 34 companies operating in the poultry, grain, flour, ready-made product manufacturing, animal feed and premix production, and veterinary medicine trading sectors. These companies are registered and operate in Lithuania, Latvia, Estonia, Poland, Belarus, Russia, and the Netherlands.
To finance the transaction, AB "Linas Agro Group" received a syndicated loan from three banks: "Luminor," "Swedbank," and SEB bank, with the company contributing one-third of the transaction amount from its own funds.
"This year, in July, we celebrate the 30th anniversary of the group's activities, and it is very symbolic that we start a new decade with double the capacity and workforce. Our ranks are now bolstered 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 countries, and compete more effectively in the open EU market. We are now entering a transitional period, and we believe it will be smooth, with both groups, which were competitors until now, working as one team," said Darius Zubas, Chairman of the Board of AB "Linas Agro Group."
After this acquisition, AB "Linas Agro Group" becomes a vertically integrated group of agricultural and food production companies in the Baltic region, operating across the entire production chain and producing products from field to table. The group's projected annual revenue could reach approximately 1.3 billion euros, with EBITDA around 50-60 million euros. The number of employees will increase from 2,100 to 6,000. After the transaction, AB "Linas Agro Group" will control 76 companies.
"This merger is a significant and important step that unites two strong organizations with a similar type and mindset. Over several decades, 'KG Group' has successfully developed and grown. I am grateful to the team for what we have achieved and built together during that time. I believe that by combining the capabilities of 'Linas Agro Group' and 'KG Group,' the work I started will continue successfully, the companies will become even stronger, and in the conditions of active competition, they will create success stories for Lithuanian products not only in the local but also in foreign markets," said Tautvydas Barštys, founder of "KG Group."
According to D. Zubas, after the transaction, the operations of all acquired companies will continue with the teams of employees who have been working in them.
"The first step we will aim to implement in the shortest possible time is to leverage synergy opportunities by consolidating purchases and increasing export volumes. We will seek such synergies in the poultry and grain export businesses," noted D. Zubas.
For the legal aspects of this acquisition, AB "Linas Agro Group" consulted and was represented by the law firm "Motieka ir Audzevičius," who, together with legal experts from "Ellex Valiūnas ir partneriai," provided advice on concentration law matters. The transaction advisors in economic and concentration matters were one of the largest economic consultancy firms in Europe, "Copenhagen Economics." The investment banking team of "Swedbank" provided financial advice, and financial and tax due diligence was carried out by specialists from "EY."