AUGA group, AB subsidiaries sold 100% of the shares of Kooperatinė bendrovė “Grybai LT” to Akcinė bendrovė „Kauno grūdai“

Advertisement

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 Kauno Grūdai AB, controlled by Linas Agro Group, (hereinafter referred to as the Buyer) concerning the sale of 100% of the shares (hereinafter the Agreement) of Kooperatinė bendrovė “Grybai LT“ (hereinafter the Company).

The Buyer and the Seller duly fulfilled all the conditions stipulated in the Agreement to finalize the transaction. On July 21, 2023, the parties signed a contract completion document, based on which 100% of the Company’s shares were transferred to the ownership of Akcinė bendrovė “Kauno Grūdai”.

In total, the Seller received EUR 16,327,365.26, including EUR 12,948,612.14 for the Company’s shares and EUR 3 378 753,12 in repayment of a loan previously owed to Baltic Champs UAB.

Advertisement

The price was calculated according to the formula established in the Agreement, which was disclosed in the announcement of AUGA group, AB on June 14, 2023 (you can access the announcement here). Following the revision of the final financial statements used for the calculation of the price, the price for shares may be adjusted in accordance with the procedures set out in the Agreement.

Please note that the Buyer did not apply to the Competition Council for a concentration clearance, as the Company’s gross revenue in the Republic of Lithuania in 2022 did not reach the threshold of EUR 2 million set out in Article 8 of the Lithuanian Competition Law, from which it becomes obligatory to notify a market share concentration to the Competition Council.

The Company produces organic ready-to-eat products such as soups, canned vegetables, stews, and grain bowls. The export geography covers 30 countries, including the the world’s leading organic markets, such as the United States, Germany, and Japan. According to the data for 2022, the Company’s revenue accounted for 8.9% of the total revenue of AUGA group, AB, and its subsidiary companies (hereinafter – the Group).

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. The parties have agreed on a maximum transition period of 18 months during which the products can still be marketed under the AUGA brand.

„We are delighted with the success of the transaction and the fact that the profitable canned and ready-to-eat products business, which we have developed from scratch, will be continued by its new owners. We have sold this business because it no longer fits with AUGA group’s strategic direction of developing agricultural technologies and providing everyday consumer products with a lower environmental footprint. The production of soups and other Grybai LT products required raw materials that we cannot grow ourselves according to the AUGA sustainability standard and thus achieve climate neutrality“, says Kęstutis Juščius, CEO of AUGA group, AB.

Kęstutis Juščius notes that the Group will continue to focus on the key strategic directions outlined in the strategy, which include developing emission-reducing agricultural technologies, expanding sustainable farming, and strengthening a new category of more sustainable organic products. The raw materials for the new products are exclusively grown in farms that adhere to AUGA’s sustainability standard. The AUGA product line, labelled as “mission with no cost to nature,” includes dairy and grain products, as well as eggs. The Group plans to expand the existing assortment and offer consumers even more products made from more sustainable raw materials, while also developing the supply of such materials to food processors. The Group’s basket of end-consumer-products also includes organic oatmeal, fresh vegetables, and fresh mushrooms grown by Baltic Champs, UAB.

“We have proven that we can successfully create new businesses and enter new foreign markets. I believe that with the experience we have gained and by concentrating our workforce and capital, we will be able to successfully develop the strategic businesses we are now focusing on. In the end-consumer-products market, we are now targeting much larger categories than before. Our goal is to export not just products, but sustainable agricultural technologies and produce more sustainable food in collaboration with farmers around the world,” says Kęstutis Juščius.

The completed transaction will significantly improve the Group’s results for 2023 and increase the consolidated profit of AUGA group, AB by approximately EUR 7-8 million.

The Group plans to use the proceeds obtained from the transaction for general corporate purposes, partial coverage of obligations, augmentation of the working capital, or financing projects approved in the strategy.

The final decision on the use of the proceeds will be made by the Group’s management in the third quarter of 2023, after this season’s harvest is completed. As mentioned in previous releases, the Group plans 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

Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. AfternoonHeadlines.com takes no editorial responsibility for the same.