Linas Agro Group has completed the acquisition of KG Group

On 15 of July, AB Linas Agro Group has completed one of the largest business acquisitions in the history of Lithuania: it has acquired controlling stakes from shareholders in AB Kauno Grūdai, AB Kaišiadorių Paukštynas, AB Vilniaus Paukštynas, and the related companies, acting together as KG Group. The amount of the transaction cannot be disclosed as per agreement of the parties.

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.

About AB Linas Agro Group

AB Linas Agro Group, together with its subsidiaries, is a group of companies established in 1991, operating in four countries – Lithuania, Latvia, Estonia, and Ukraine. The companies of the group produce, prepare and sell agricultural raw materials and food products, supply goods and services to farmers.

The group is one of the largest Lithuanian and Latvian grain exporters and has a network of 13 grain elevators. It is also one of the leaders in the supply of agricultural inputs (certified seeds, fertilizers, plant care products and agricultural machinery) in Lithuania, also has a seed preparation plant. The group owns 7 agricultural companies in Lithuania and is a large milk producer. It is also the largest poultry producer in Latvia, where it owns 4 poultry companies.

AB Linas Agro Group consolidated revenue for the 9 months of the financial year 2020/2021 amounted to €712 million, gross profit was €29.2 million. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to €17.1 million.

For more information please contact:

Andrius Pranckevičius

Deputy Chairman of the Board of AB Linas Agro Group
Mob. +370 687 71 19
E-mail a.pranckevicius@linasagro.lt

Mažvydas Šileika

Finance Director of AB Linas Agro Group 
Mob. +370 619 19 403
E-mail m.sileika@linasagro.lt

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