4 July 2008 - Agrowill Group has completed the acquisition of Estonian milk production company Põlva Agro On July 3, Agrowill Group, the largest agricultural investment and development group in the Baltic States, successfully completed the acquisition of Põlva Agro, one of the largest and most efficient milk farms in Estonia.
“We believe in agricultural perspectives in Estonia, therefore the company we have bought will serve as the basis for further expansion. We are already considering the acquisition of some other companies”, emphasized Valentas Šulskis, Agrowill Group CEO.
The acquisition of Põlva Agro was financed from the funds of Agrowill Group, along with Estonian bank loans. The leading independent Baltic investment bank GILD was the Group’s financial adviser in the deal.
GILD Bankers Partner Šarūnas Skyrius assures that agriculture remains a very attractive sector: ”Strong demand and favourable prices of agricultural commodities in general make agriculture one of the few sectors, where there is substantial investor interest. Agrowill with its clear consolidation strategy is well positioned to benefit from this trend.“
According to the audited data, Põlva Agro had a net non-consolidated income of EUR 4.56 million in 2007, and EBITDA reached EUR 1.97 million, which was up by 43.2 per cent from EUR 1.36 million in 2006. The net profit of the company amounted to EUR 1.59 million in 2007, indicating an increase of 35 per cent year-on-year. In 2008, the company expects to earn EUR 5.39 million in total revenues.
According to Mr. Šulskis, the acquisition will enhance the position of Agrowill Group in the dairy sector. Põlva Agro is probably the most modern milk production company in the Baltic States. This will allow Estonian experience and knowledge to be transferred to Lithuanian farms. Põlva Agro is the most productive dairy company in Estonia, producing an average of 10.7 tons of milk per cow – a total of 12.2 tons of milk over 2007. The company has 2173 cattle including 1175 milking cows. Põlva Agro controls 2325 hectares of land.
“We are implementing our aggressive expansion strategy in Lithuania, as well as Eastern and Central Europe. In June, Agrowill Group signed a share purchase agreement regarding acquisition of Grūduva, one of the most modern agricultural companies in Lithuania. We would like to merge at least 5–8 more companies within the next nine months. We are now looking to Moldova, where we intend to buy up to five thousand hectares of fertile land of black soil. At present we are considering the possibilities of acquisition of three crop production companies in Russia, the smallest of which cultivates 11,000 hectares of land” – these expansion plans were presented by the Agrowill Group CEO.
The consolidated net profit of Agrowill Group was LTL 3.19 million (EUR 9.2 million) in 2007 on total revenues of LTL 69 million (EUR 20 mln). Excluding the effect of revaluation of investment property, net profit for 2007 amounted to LTL 9.8 million (EUR 2.8 million), while income from main operations stood at LTL 43 million (EUR 12.5 million).