Origin expands in €22m deal

Irish agribusiness company Origin Enterprises has completed the €22.4m takeover of a Polish counterpart as part of its ongoing expansion in the Eastern European market.

Origin expands in €22m deal

The group yesterday announced it had reached agreement to acquire 100% of the Kazgod Group which employs more than 200 people and services some 2,600 customers.

The firm’s takeover will extend its reach into Kazgod’s strongholds in central and eastern Poland, complementing its existing operations under the Dalgety brand in the west of the country.

The acquisition fits Origin’s expansion plans and will deliver cost-savings, according to chief executive Tom O’Mahony.

“Kazgod, through providing transformative and meaningful scale expansion in Eastern Europe, furthers Origin’s strategic development objectives and positions the group as the premier service provider to primary arable producers in Poland,” said Mr O’Mahony.

Some €20.3m of the total consideration will be paid up front with the remaining €2.1m deferred until three years after the completion of the deal.

Origin says that it expects savings to be achieved over a three-year period.

Jack Gorman, Davy Stockbrokers analyst, said at first glance the profile of Kazgod is complementary to that of Dalgety.

Kazgod is an agronomy services, crop marketing products and manufacturer of micro nutrition applications.

It had revenues of €200m last year and earnings before interest and tax of €1.2m.

Kazgod Group founder and president, Kazimierz Kuzminski said that he was pleased to have reached an agreement with the Irish firm.

“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.

The deal follows recent acquisitions in Romania and existing operations in Ukraine as Origin continues to focus its expansion on eastern Europe.

The deal will be funded from the remaining proceeds of the Valeo Foods divestment in July which yielded €86.6m.

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