LT Foods acquires Hungary based Global Green Europe Kft. for €25 million

LT Foods, a global FMCG Company in the consumer food space, has signed a definitive agreement to acquire 100% stake in Hungary-based Global Green Europe Kft. for an Enterprise Value of approximately €25 million.

This acquisition is in line with the long term strategy of the company for growth through packaged food and to further strengthen its RTH and RTE segment. This move will allow LT Foods to make further inroads in Central and Southern Europe while adding synergies with its cross distribution network.

The acquisition will be executed through LT Foods Europe Holdings Limited, a wholly-owned step-down subsidiary of LT Foods. Under the agreement, LT Foods will pay €6 million at closing for 100% equity shareholding, with the remaining €1.8 million payable over the next 2 years through earn-out mechanism besides taking over the borrowings. The transaction includes the acquisition of Global Green International (UK) Limited and Greenhouse Agrár Kft., which serve as support and distribution entities. The deal is subject to FDI approval in Hungary.

The Hungarian operations of Global Green were established in 2006 following the acquisition of the erstwhile Intergarden N.V. and today serve more than 30 countries across Europe. The company is a key player in the production of Sweet Corn in Cans, and Gherkins, Silver Skin Onions, Peas and Sour Cherries in Jars, with 2 manufacturing sites spread across 45 acres of land in Hungary. With an annual turnover of €40 million and a workforce of over 170 employee Global Green Europe Kft. enables LT Foods to consolidate its strong position in the European market.

This category is estimated at €15 billion across Europe. This acquisition provides LT Foods with a strategic opportunity to diversify into this large addressable market. This business is the stepping-stone for LT Foods for high value processed canned food in the world. The business model of Global Green Europe Kft. provides synergy with LT Foods' existing business in Europe, offering the potential for crossselling and efficiencies across the value chain.

Prowess Advisors, a food and agribusiness focused investment banker, acted as the exclusive Transaction Advisor for LT Foods on this deal.

Speaking on the occasion, the Executive Chairman of LT Foods Limited - Mr. V K Arora said, "This acquisition marks an important step forward in our strategy of expanding our product portfolio and global footprint. The acquisition of Global Green Europe Kft. enables us to enter the processed canned food market, leveraging synergies with our existing business in Europe. This acquisition also reinforces our commitment to building a globally diversified food portfolio while maintaining its leadership in ricebased products. We see this as an opportunity to further strengthen our relationship with customers and consumers by offering them a wider range of high-quality, ambient packaged food products, aligned with our purpose of providing 'Nurturing Goodness' for people, planet and the community."

Mr. Vikas Magoon from LT Foods Europe said, "We already have a strong presence in Europe through our manufacturing operations in the Netherlands and the United Kingdom. Addition of Global Green Europe Kft., Hungary will enable LT Foods to establish a third manufacturing hub in Europe, strengthening its foothold in Central and Southern Europe. A manufacturing base in Hungary also offers a relative cost advantage vis-à-vis our existing facilities, enhancing LT Foods' competitiveness in the region. With expanded manufacturing capabilities and access to a broader consumer base, the company is well-positioned to deliver sustainable growth and value across markets."

Shares of LT Foods Limited was last trading in BSE at Rs. 400.30 as compared to the previous close of Rs. 401.75. The total number of shares traded during the day was 29611 in over 1127 trades.

The stock hit an intraday high of Rs. 402.95 and intraday low of 391.20. The net turnover during the day was Rs. 11746406.00.

Source : Equity Bulls

Keywords

LTFoods INE818H01020 DAAWAT PackagedFoods FMCG Acquisition GlobalGreenEuropeKft