Correction: AUGA group, AB subsidiaries signed a share sale
agreement of the Kooperatinė Bendrovė "Grybai LT" with Akcinė
Bendrovė "Kauno grūdai"
AUGA group, AB supplemented the
announcement with the calculation formula for the sale price of
shares and other information.
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:
Sale price = EUR 17,000,000
(i.e. the value of the Company shares fixed by agreement between
the parties), minus Company's net debt (i.e. the
difference between Company's financial debts and its cash and cash
equivalents), plus the difference between the
Company's base net working capital (EUR 1,601,176.51) and the net
working capital as at the closing date, minus all
Company‘s costs related to the transaction.
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. Company's revenue in 2022 was EUR 7.1
million, net profit was EUR 0,8 million, assets were EUR 7.9
million.
The completed transaction will significantly
improve the results of AUGA group, AB and its subsidiaries in 2023.
The exact selling price of Company's shares will be calculated on
the day of completion of the transaction, however, AUGA group, AB
estimates that by selling the Company, it will increase the
consolidated net profit of AUGA group, AB by 7-8 million EUR.
"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, the Company's end-consumer-products account for only up
to 10% of the total revenues of 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 can be used
for:
- general corporate purposes of AUGA group, AB and its
subsidiaries;
- partial coverage of AUGA group, AB and its subsidiaries'
obligations;
- augmentation of the working capital of AUGA group, AB and its
subsidiaries;
- financing approved projects in the strategy of AUGA group, AB
and its subsidiary companies.
As the transaction has not yet been approved by
third parties (the Competition Council), and as the operations of
AUGA group, AB and its subsidiaries are subject to market
fluctuations in production prices and weather conditions affecting
harvest results, the issuer will take a final decision on the use
of the proceeds of the final transaction in the third quarter of
2023.
Following the closing of the transaction, AUGA
group, AB will disclose the exact use of the proceeds of the
transaction after taking into account all the circumstances at the
time and the results of the 2023 harvest.
AUGA group, AB and its subsidiary companies
prioritize the implementation of its strategy. In the field of food
products for consumers, the focus will be on creating and
developing new sustainable product category. The management of AUGA
group, AB and its subsidiary companies expects that by
concentrating both financial and human resources on core
activities, the best results will be achieved, and market share
will be captured in food categories that are much bigger than
previous ones. Moreover, 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 Officer Kęstutis Juščius +370 5 233 5340
Auga Group Ab (LSE:0IR4)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Auga Group Ab (LSE:0IR4)
Historical Stock Chart
Von Mai 2023 bis Mai 2024