Expansion of Agri-Services in Poland
Origin Enterprises plc, the Agri-Services Group, ('Origin' or 'the Group') today announces that it has reached agreement to acquire a 100 per cent interest in the Polish based Kazgod Group ('Kazgod', 'the Business' or 'the Transaction'). Kazgod significantly augments Origin's existing operations in Poland which are currently servicing approximately 3,500 largely arable farmers under the Dalgety brand.
Founded in 1989, Kazgod is a leading provider of agronomy services, inputs, crop marketing solutions as well as a manufacturer of micro nutrition applications. The Business, which employs over 200 people, services some 2,600 customers across an established direct farm and retail distribution network throughout central and eastern Poland. Kazgod strongly complements Dalgety's activities which are principally concentrated in western Poland.
Under the terms of the transaction Origin will acquire 100 per cent of Kazgod based upon an enterprise value of PLN92.8 million (€22.4 million) incorporating average working capital. Approximately PLN84.3 million (€20.3 million) of the total consideration will be satisfied on completion with PLN8.5 million (€2.1 million) deferred and payable three years following completion. The acquisition is being funded from existing banking facilities. Kazgod's revenues and normalised earnings before interest and tax for the year ended 31 December 2014 were PLN837 million (€200 million) and PLN 5.1 million (€1.2 million), respectively. Tangible integration benefits across Kazgod and Dalgety are targeted to be achieved over the three year period following completion of the acquisition.
The Transaction, which is subject to a number of conditions including clearance from the Office for the Protection of Competition and Consumers ('OCCP') in Poland, is expected to complete during December 2015.
Commenting on the announcement, Origin Chief Executive Officer Tom O'Mahony said:
"Kazgod, through providing transformative and meaningful scale expansion potential in Eastern Europe, furthers Origin's strategic development objectives and positions the Group as the premier service provider to primary arable producers in Poland. The combination of Kazgod and Dalgety will bring benefits through new customer extension opportunity and an enhanced capacity for the development of new and innovative service propositions.
Kazgod is a highly focused business with a dedicated commitment to customer service and quality. We are delighted to welcome Kazimierz Kuzminski and his team to the Origin Group."
Commenting on the announcement, Kazimierz Kuzminski, Founder and President of the Kazgod Group said:
"I am pleased to have reached agreement with Origin. Kazgod together with Dalgety will enhance Origin's competitive position in the Polish agri-services market.
We now have a like-minded partner with a depth of technical resource and knowledge transfer capability that can transform the breadth and scope of service support to our customers. I am delighted that our client offering will take a substantial step forward through the continued efforts of my management and people together with Origin's industry-leading technical expertise and customer-oriented mindset."
ENDS
Enquiries:
Origin Enterprises plc
Imelda Hurley
Chief Financial Officer
Tel: + 353 (0)1 6121259
Davy Corporate Finance (Nominated Advisor)
Anthony Farrell
Tel: + 353 (0)1 6796363
Goodbody (ESM Advisor)
Kevin Keating
Tel: + 353 (0)1 6670420
Murray Consultants
Douglas Keatinge
Tel: + 353 (0)1 4980379
About Origin Enterprises plc
Origin Enterprises plc is a focused Agri-Services Group providing on-farm advice and the supply of agri-inputs. The Agri-Services business through its manufacturing and distribution operations in Ireland, the United Kingdom, Poland and Ukraine has leading market positions in the supply of specialist agronomy services, crop nutrition and feed ingredients. The Group is listed on the ESM and AIM markets of the Irish and London Stock Exchanges.
ESM ticker symbol: OIZ
AIM ticker symbol: OGN
Website: www.originenterprises.com
