AB Akola Group completes successful acquisition of Latvian company

Date:12-25-2024

SIA Linas Agro, an indirectly controlled company of AB Akola Group, has acquired 100% of the shares of SIA Elagro Trade, a Latvian company, from Agrolats Holding AS and three natural persons. The deal has been authorized by the Competition Council of the Republic of Latvia. The final amount of the transaction has increased from EUR 22 million to EUR 25.5 million due to the higher-than-expected net working capital of the target company at the closing date. The investment is estimated to pay for itself within five years. 

SIA Elagro Trade is a grain, seeds, plant protection products, and fertilizers business operating in Latvia since 2010 with a market share of 15%. In 2023, SIA Elagro Trade had revenue of EUR 154 million and EBITDA (earnings before interest, taxes, depreciation, and amortization) of EUR 2.1 million. The company employs 68 people.

"For over two decades, we have strengthened our position in Lithuania because you cannot be strong in all countries simultaneously. In Latvia, where we have been operating since 2003, we had a much smaller grain intake capacity, warehouse space, and market share. This acquisition should give us the same leadership in Latvian grain exports as we have in Lithuania. Grain storage capacity alone will more than triple to 161,000 tons. In 2025, we will focus on merging teams and businesses and improving the customer experience, and we expect to retain all of SIA Elagro Trade's customers and attract new ones," says Mažvydas Šileika, the Chief Financial Officer of AB Akola Group.

The acquisition of SIA Elagro Trade will complement the group's infrastructure for the agricultural service business with grain elevators in Eleja, Jekabpils, and Skulte and covered warehouses and liquid fertilizer storage facilities in Eleja and Jekabpils.

"By leveraging the resources and experience of Linas Agro and Elagro Trade, we will be able to offer better and more diverse solutions to our customers, invest in innovation, and ensure long-term stability for both the company and its employees. We estimate that once the integration process is complete, this acquisition will deliver financial benefits within 5 years, if not sooner," says Jonas Bakšys, member of the management board of AB Akola Group and CEO of AB Linas Agro, the parent company to SIA Linas Agro.

AB Linas Agro, the parent company of SIA Linas Agro, is borrowing EUR 14 million from SEB Bank for acquisition of the Latvian company.

In the last financial year, the group of companies owned by AB Akola Group sold 1.5 million tons of grain and oilseeds worth EUR 388 million. Over EUR 246 million in revenue was generated from selling seeds, plant protection products, and fertilizers. In Latvia, farmers are served by five companies - SIA Linas Agro, SIA Dotnuva Baltic, SIA Linas Agro Graudu Centrs, UAB Geoface, and SIA KG Latvija. SIA Dotnuva Seeds, founded last year, is building a seed factory in Iecava, which is expected to be operational by mid-2025.

About AB Akola Group

AB Akola Group operates the largest group of agricultural and food production companies in the Baltic States, employing over 5,000 people. The group operates along the entire food production chain from farm to fork, producing, preparing and marketing agricultural and food products, and providing goods and services to farmers. The Group's financial year starts in July and its consolidated revenue for the last financial year exceeded EUR 1.5 billion.