0NSG Akola Group Ab

AB Linas Agro Group completed the acquisition of part of the business from AUGA Group, AB

On 21 July 2023, AB Kauno Grūdai, owned by AB Linas Agro Group, completed the acquisition of the cooperative company Grybai LT by acquiring 100 percent of the company's stock and paying the sellers a total amount of EUR 12,948,612.14. In addition, AB Kauno Grūdai refinanced loans granted to the cooperative company Grybai LT in the past by the bank and one of the sellers, UAB Baltic Champs, by granting new loans to the cooperative company Grybai LT in the total amount of EUR 4,121,813.15. Following the revision of the final financial statements used to calculate the price, the price for shares may be adjusted per the procedures set out in the share purchase agreement.

The shares in Grybai LT were sold to Kauno Grūdai by the cooperative companies AgroMilk, Juodmargėlis, Šventosios Pievos, also UAB Baltic Champs and UAB AUGA Luganta, all of which together owned 100% stake of Grybai LT. Two of the latter sellers are owned by the public company AUGA group, while the others are also related to this company through shareholders.

Grybai LT, a cooperative company based in Širvintos with over 40 employees, is active in producing and selling ready meals. The company operates a modern robotic factory covering an area of around 3,600 sq meters. The main products produced are ready-to-eat organic soups, curries, cereal meals, and organic vegetables in packets - around 70 product names. The annual production is 8-9 million packets of various products which are exported to more than 30 countries. Grybai LT's revenue in 2022 was EUR 7.1 million, consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) was EUR 1.3 million, and assets were EUR 7.9 million.

Linas Agro Group has plans to expand Grybai LT's production activities by 3.7 times in 5-6 years, investing approximately EUR 4.4 million in production expansion during that period. Grybai LT's annual earnings before interest, taxes, depreciation, and amortization (EBITDA) are expected to increase by 4.6 times, and the Group's EBITDA by 5-10%.

Earlier, AB Linas Agro Group had announced that the transaction would require clearance from the Competition Council of the Republic of Lithuania.

"In 2022, Grybai LT's gross revenue in the Republic of Lithuania did not reach the threshold of EUR 2 million set out in Article 8 of the Law on Competition of the Republic of Lithuania, from which it is obliged to notify the concentration to the Competition Council of the Republic of Lithuania, and, therefore, the transaction did not require the clearance of the Competition Council. This fact allowed the transaction to be completed more quickly," explained Mažvydas Šileika, CFO of AB Linas Agro Group, explaining why the transaction did not require the approval of the Competition Council of the Republic of Lithuania.

"The AUGA’s range of instant porridge in cups and the business will remain part of the AUGA group as we have our porridge line Activus. We have agreed that we will be able to use the AUGA brand for 18 months for soups, curries, cereal meals, ready-to-eat vegetables and pulses, and then we will replace it with our own “Activus” brand, as it is a brand for active and busy, but self-concerned people, especially for the younger generation," says Andrius Pranckevičius, Deputy Chairman of the Board of Directors of AB Linas Agro Group and CEO of AB Kauno Grūdai.

AB Linas Agro Group was represented in the transaction by the Law Firm Norkus & Partners COBALT, and the companies selling the shares by the Law Firm WALLESS.

About AB Linas Agro Group

The 68 agribusiness and food companies AB Linas Agro Group owns employ almost 5 thousand people. The Group's financial year starts on 1 July. The Group's consolidated revenue for the nine months of the 2022/2023 financial year exceeded EUR 1.5 billion, with a net profit of EUR 25 million.

Additional information will be provided by:

CFO of Linas Agro Group AB Mažvydas ŠileikaMob. +370 619 19 403E-mail m.sileika@linasagro.lt

Andrius Pranckevičius, Deputy Chairman of the Board of AB Linas Agro Group Mob. +370 687 71 419 E-mail a.pranckevicius@linasagro.lt