28th Jul 2015 11:04
LONDON (Alliance News) - Origin Enterprises PLC Tuesday said it has disposed of its 32% equity interest in Valeo Foods Group Ltd to CapVest Partners LLP for EUR42.5 million plus a further EUR44.1 million for the settlement of its loan note.
The agri-services group established Valeo in 2010 with CapVest to facilitate the merger of its wholly owned consumer food interests and Irish food company Batchelors. It said its profit after interest and tax from Valeo is expected to average EUR6.5 million for the three years to July 31, while interest earned on the loan note will average EUR2.1 million.
The proceeds from the disposal will be used to reduce debt and for further investments in agri-services, Origin said.
"The transaction furthers the group's capital reallocation objectives while tightening Origin's strategic focus as we prioritise the further development of agri-services. Valeo's proven track record and execution capability will support further category leading innovation and the extension of current sector positions," Chief Executive Tom O'Mahony said in a statement.
Separately, Origin said that it will buy Romanian-based agronomy services providers Redoxim SRL and Comfert SRL for EUR35 million and EUR19.4 million, respectively.
Redoxim made a revenue of EUR53.6 million and operating profit before non-recurring items of EUR5.6 million in 2014. The transaction is expected to complete during September 2015. Comfert made a revenue of EUR100.6 million and operating profit before non-recurring items of EUR3.2 million in 2014. The transaction is expected to complete during October 2015.
The acquisitions are being funded from existing bank facilities and are expected to be earnings enhancing from the 2016 financial year onwards, Origin said.
"Redoxim and Comfert represent an excellent strategic fit for Origin providing complementary expertise, meaningful geographic extension and strong brand reputation on-farm. The transactions underline Origin's strategic priority to scale its technology and service portfolios in new markets with favourable agronomic application opportunity," O'Mahony said.
Shares in Origin were trading down 2.3% at 7.57 pence midday Tuesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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