AUGA group, AB subsidiaries signed a share sale agreement of the Kooperatinė Bendrovė "Grybai LT" with Akcinė Bendrovė "Kauno grūdai"
07 Juin 2023 - 4:30PM
AUGA group, AB subsidiaries signed a share sale agreement of the
Kooperatinė Bendrovė "Grybai LT" with Akcinė Bendrovė "Kauno
grūdai"
On 7 June 2023 AUGA group, AB subsidiaries
Baltic Champs, UAB, UAB “AUGA Luganta“, Kooperatinė Bendrovė
“AgroMilk“, Kooperatinė Bendrovė “Juodmargėlis“ and Kooperatinė
Bendrovė „Šventosios pievos“ (hereinafter the Seller) have signed
an agreement with AB Linas Agro Group controlled Akcinė Bendrovė
Kauno Grūdai (hereinafter - the Buyer) concerning the sale of 100%
of the shares of the Kooperatinė Bendrovė “Grybai LT“ (hereinafter
the Company). Negotiations regarding sale of the shares of the
Company were conducted on the basis of the letter of intent signed
on 7 March 2023 between the Buyer and the main member of the
Company Baltic Champs, UAB.
The transaction will be completed only if the
permission of the Competition Council to carry out the
concentration is obtained, the consent of the bank financing the
Company and other preconditions usual for such transactions are
met.
The sale price of the Company's shares will be
calculated for the closing date in accordance with the formula set
out in the agreement, taking into account the Company's current
financial data as at the closing date, including the Company's
working capital, financial debt, cash and transaction-related
expenses.
The Company was established in 2012 to process
mushrooms grown in Lithuania. Since 2016, the Company has been
producing ready-to-eat products such as soups, canned vegetables,
etc. in a modern automated factory and has been continuously
expanding its product range.
"We have successfully created and developed a
completely new business segment, and a category of ready-to-eat
soups, which was almost non-existent in Lithuania, even though we
were not food processors and had no experience in food production
before. We started from scratch - from the idea, to the selection
and implementation of the necessary production technologies, to the
development of products and search for new markets. Thanks to our
team and its consistent work, today the Company's products are
available in 30 countries around the world. We are pleased that we
have managed to attract the attention of consumers not only in
Lithuania, but also to enter the world's leading markets for
organic products such as: United States of America, Germany, Japan,
and to establish ourselves in them", - said Kęstutis Juščius, CEO
of AUGA group, AB.
The Company's soups and other
end-consumer-products are marketed under the AUGA brand and private
labels. Although many consumers associate the AUGA brand with these
products, end-consumer-products account for only up to 10% of the
revenues of the AUGA group, AB and its subsidiaries.
"Although the products have been successful and
recently the Company that produces them has been growing its
turnover by around 30% annually and has been profitable, we have
taken the decision to exit and sell this well-developed business.
Over the last 2-3 years, AUGA group, AB and its subsidiaries have
found a way to tackle the largest sources of emissions in
agriculture through technology. By solving them, a new category of
sustainable food with "no cost to nature" is created. These
products will be made exclusively from raw materials grown on farms
that apply AUGA sustainable farming standard. The new dairy and
cereal products under the 'mission no cost to nature‘ label are
already available to consumers in Lithuania. In the future, we will
seek to expand abroad not by exporting packaged products (as
produced by KB Grybai LT), but by providing technology and working
with local farmers and processors to bring the products with no
cost to nature to consumers in other countries. AUGA will create
and develop a new category in food and will become synonim for
sustainable food," says Kęstutis Juščius, CEO of AUGA group,
AB.
AUGA group and its subsidiaries plan to further
expand the range of the new "no cost to nature" product line and
continue building the AUGA brand.
"We believe that the sustainable food category
is several dozen times bigger than the one the Company has been
producing so far, and AUGA is demonstrating leadership in it," adds
Kęstutis Juščius, General Director of AUGA group, AB.
Consumers will still be able to find their
favourite soups, canned vegetables and other food products on the
shelves, but in the future these products will be branded not under
AUGA but different brand name.
Commenting on the transaction, Darius Zubas,
Chairman of the Board of Linas Agro Group, said: "Our ambition is
to grow by diversifying our activities, and the most attractive
seems to be the development in the food segment. We have not yet
had any ready-to-eat product groups in our product range, nor have
we had any organic food products. Following the acquisition of
Grybai LT, we will expand our product range with three new product
groups. Organic products will not only complement our product range
perfectly, but will also take us into markets such as the USA and
Japan, where Grybai LT has made significant inroads. We see an
opportunity to increase production and clear synergies with our
other activities."
"We are delighted to be able to put the business
we have developed in good hands. The new owners of the Company will
be able to leverage their experience and synergies with their other
activities to expand in the existing markets and reach even more
export countries, creating value for the Company, its employees and
the entire Lithuanian economy", - says Kęstutis Juščius, CEO of
AUGA group, AB.
The proceeds from the transaction will be used
for general corporate purposes of AUGA group, AB and its
subsidiaries. As previously announced, the AUGA group, AB
subsidiaries plan to raise new capital and additional funding for
the development and expansion of the technology branch.
Chief Executive OfficerKęstutis Juščius+370 5 233 5340
Auga Group Ab (LSE:0IR4)
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