SIA Linas Agro, a subsidiary of AB Akola Group, has acquired 100% of SIA Elagro Trade, a Latvian agricultural company. The deal was approved by the Competition Council of Latvia. Initially valued at €22 million, the final transaction amount rose to €25.5 million. This increase was due to higher-than-expected net working capital at the closing date. The investment is expected to pay off within five years.
About SIA Elagro Trade
Founded in 2010, SIA Elagro Trade operates in the Latvian agricultural sector. The company specializes in grain, seeds, plant protection products, and fertilizers. With a market share of 15%, it generated €154 million in revenue and €2.1 million in EBITDA in 2023. The company employs 68 people and is well-established in Latvia.
Strategic Goals of the Acquisition
Mažvydas Šileika, CFO of AB Akola Group, outlined the goals behind the acquisition:
“For over two decades, we have strengthened our position in Lithuania. Expanding in Latvia is a logical next step. This acquisition will give us the same leadership in Latvian grain exports that we have in Lithuania. Our grain storage capacity will more than triple to 161,000 tons. In 2025, we will focus on merging teams, improving the customer experience, and retaining existing clients while attracting new ones.”
Strengthening Infrastructure and Operations
The acquisition adds significant value to AB Akola Group’s infrastructure. It includes grain elevators in Eleja, Jekabpils, and Skulte, as well as storage facilities for covered warehouses and liquid fertilizers in Eleja and Jekabpils.
Jonas Bakšys, CEO of AB Linas Agro, emphasized the benefits of the merger:
“Combining the resources of Linas Agro and Elagro Trade will allow us to offer better solutions to customers. We’ll also invest in innovation and ensure long-term stability for both the company and its employees. We expect financial benefits from this acquisition within five years, if not sooner.”
Financing the Acquisition
To fund the acquisition, AB Linas Agro secured €14 million in financing from SEB Bank.
AB Akola Group’s Broader Impact
AB Akola Group had a successful year. The group sold 1.5 million tons of grain and oilseeds, generating €388 million in revenue. An additional €246 million came from the sale of seeds, plant protection products, and fertilizers.
In Latvia, AB Akola Group operates five companies, including SIA Linas Agro and SIA Dotnuva Baltic. Additionally, the group is building a seed factory in Iecava under its new company, SIA Dotnuva Seeds. The factory is set to open by mid-2025.
Looking Ahead
The acquisition of SIA Elagro Trade strengthens AB Akola Group’s position in the Baltic agricultural market. With a clear strategy for integration and growth, the group is well-positioned for continued leadership in the industry.
