Agrowill Group wraps up acquisition of Estonia’s Polva Agro

On 3 July, Agrowill Group, the largest agricultural investment and development company in the Baltic states, successfully completed the acquisition of Polva Agro, one of the largest and most effective Estonian dairy companies.

“We believe in the agricultural prospects of Estonia. Therefore, the acquired company will serve as a basis for further development in this country. We are already considering possibilities to acquire several more companies,” Valentas Šulskis, General Manager of Agrowill Group, said.

The acquisition of Polva Agro was financed by Agrowill Group’s own funds and loans extended by Estonian banks. Investment bank GILD was a financial advisor of Agrowill Group in this transaction.

“Growing demand for products and favourable prices indeed make the agricultural sector a very attractive area for investments. Having a clear development strategy, Agrowill Group may expect successful results,” Šarūnas Skyrius, a partner of GILD Bankers, said.

According to audited data, unconsolidated net earnings of Polva Agro in 2007 totalled EUR 4.56 million, with its EBITDA recorded at EUR 1.97 million, up by 43.2% from EUR 1.36 million in 2006. The company’s net profit in 2007 reached EUR 1.59 million, up by 35% year-on-year.  In 2008, the company expects to generate EUR 5.39 million earnings.

According to Šulskis, this acquisition will strengthen Agrowill Group’s positions in the dairy sector. Polva Agro is probably the most modern dairy company in the Baltic states. This will facilitate the transfer of Estonians’ experience and knowledge to Lithuanian farms.

Polva Agro is the most productive dairy company in Estonia. Its average annual milk yields per cow make up 10.7 tons. Milk yields in 2007 totalled 12,200 tons. The company has a herd of 2,173 cattle, including 1,175 dairy cows. Polva Agro controls 2,325 hectares of land.

“We are continuing the implementation of the selected strategy and active development both in Lithuania and in Eastern and Central Europe. A purchase and sale agreement on the acquisition of Grūduva, one of the most modern agricultural companies in Lithuania, was signed in June. We would like to incorporate at least 5–8 Lithuanian companies more in the next 9 months. We are entering Moldova where we plan to buy up to 5,000 hectares of fertile black earth soils. We are considering possibilities to acquire three companies in Russia that are engaged exclusively in crop production. The smallest of them cultivates 11,000 hectares of land,” the General Manager of Agrowill Group described development plans.

In 2007, consolidated net profit of Agrowill Group totalled LTL 31.9 million (EUR 9.2 million). In 2007, its earnings made up LTL 69 million (EUR 20 million). Excluding the effect of revaluation of investment properties, net profit in 2007 amounted to LTL 9.8 million (EUR 2.8 million) and earnings from the main activities reached LTL 43 million (EUR 12.5 million).

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