Invalda LT, one of the major Lithuanian investment companies, is selling 45.4 % stake in Vilniaus Baldai and increases its share in Litagra, one of the largest agricultural business companies in the Baltic states, up to 36.9 %. The total value of both deals increases LTL 104 million.
Agreements with Invalda Privatus Kapitalas, regulating the deal, have been signed on Monday. Transactions should be completed when the Competition Council permits are received and all other conditions, laid down in the agreements, are fulfilled.
Invalda LT will receive LTL 80.198 million for 45.4 % stake in Vilniaus Baldai. The deal will be completed after the shareholders of Vilniaus Baldai have distributed dividends; therefore the price for shares will be lowered by the paid-out amount. The positive effect of the deal should be reflected in the results of Invalda LT for the second quarter of 2014. Preliminary standalone equity capital of Invalda LT will increase by LTL 60.5 million, consolidated – LTL 6.1 million.
Another LTL 24,124 million deal will allow Invalda LT to acquire 45.45 % of Cedus Invest shares from Invalda Privatus Kapitalas, thus increasing stake in the company up to 100 %, and undertake all loans of the company. Cedus Invest owns 36.9 % of Litagra shares.
Invalda invested into Vilniaus Baldai capital 20 years ago. Long time results show that Vilniaus Baldai is one of the most efficient manufacturing companies in the region, working profitably and generating significant cash flow to shareholders.
“We are grateful to all managers and employees developing the company. Due to their effort we now have high work culture, modern, market valued company. Over the long term, the company has implemented an internal culture where employees engage in constant development of the business processes. In this environment our contribution, as a shareholder, to the success of the company becomes minimal, therefore, in accordance with the principle to work where our efforts create the largest added value, we are going to concentrate on other activities and investments,” – commented D. Sulnis.
According to him, upon the right price, Invalda LT may exit also from the managed and well-functioning business.
Based on last 12 months results, the value of Vilniaus Baldai in the deal is estimated to be at 10.6 P/E, 7.4 EV/EBITDA and 3.1 P/BV. Sales of the company reached LTL 166.116 million in 2013, earnings before interest, taxes, depreciation and amortisation (EBITDA) – LTL 21.1 million, net profit – LTL 14.3 million.
“Having evaluated the multipliers and market price averages for several years, historical dividends paid by the company, potential of the company, risks and business prices in the Baltic region, it can be stated that transaction price is quiet good. We believe that the company’s future major shareholder, Invalda Privatus Kapitalas, AB, will continue successful management of Vilniaus Baldai”, – said D. Sulnis.
According to him, the Board of Invalda LT also completed a review of Litagra’s strategic alternatives and decided to enlarge the stake.
“Since our first investment in Litagra at the end of 2011, the company has increased its business volume and profitability. We believe that the full potential of the company is still unused and we will be able to contribute to the organic growth of Litagra Group and consolidation of the market through acquisitions,”- said D. Sulnis.
According to him, Litagra operates in several different agricultural and food processing segments of Lithuania, Latvia and Estonia and is involved in the global food supply chain. “A wide range of activities and the possible geography of business, based on the traditional competitive industries in the region, opens up diverse opportunities for growth and development,” – said D. Sulnis.
As it was announced earlier, in 2013, Litagra, operating in Lithuania, Latvia and Estonia, collected LTL 452.5 million revenue; earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to LTL 28.1 million.
Consolidated Litagra equity value, attributable to shareholders of the Company, reached LTL 129.474 million at the end of 2013. The 100% stake of the company was evaluated at LTL 143.8 million in the acquisition deal.