Rīgas Piensaimnieks has been owned by an affiliate of Darby Private Equity since 2010. The aim of the acquisition is to further consolidate the company with the Food Union Group, the leading Latvian dairy producer.
The transaction now requires a clearance by the Competition Council of Latvia. No exact timeline for closing is being estimated at this stage and no financial terms of the transaction will be released, as they constitute commercially confidential information.
Meridian Capital is an established financial partner of Food Union, the leading dairy producer in Latvia, which is represented on the Supervisory Council of Food Union by Nodir Normatov, an Investment Director at Meridian Capital.
«In this transaction we were above all else attracted by the exceptional product portfolio of Rīgas Piensaimnieks, which includes such leading brands as Kārums and Dzintars. We see a complimentary match between the production processes and product portfolios of Rīgas Piensaimnieks and the Food Union group of companies without creating any competitive overlap. Rīgas Piensaimnieks has some outstanding products in cottage cheese, curd snacks and milk dessert categories, which are not served by Food Union,» – says Nodir Normatov.
«We welcome this transaction as part of building a regional dairy business leader, which has aspirations beyond the Baltic and Central European markets. Further consolidation of the complimentary brands of Rīgas Piensaimnieks and those of Food Union will strengthen our tripartite strategy, which consists of building the leading dairy producer in the Baltic region, developing a fruitful dairy farming production, and retail ecosystem and expanding into new, significant export markets, particularly in the East,» – says Andrey Beskhmelnitskiy, founder and shareholder of Food Union Group.
«We evaluate this transaction to be the next big strategic step in the direction of long awaited dairy industry consolidation in Latvia, that is expected to increase efficiency and productivity, increase raw milk purchase and production volumes, thereby creating clear benefits for consumers and dairy farmers, as well as for competitiveness of Latvian dairy industry among other dairy producing countries in the Northern European milk belt,» – adds Neeme Jogi, Chairman of the Board at Rīgas Piensaimnieks.
Meridian Capital is an international private equity investment group that has made several investments in dairy companies in Russia and the Baltics countries, among other investments. Meridian Capital financed the roll-out of Unimilk, which became the second largest Russian dairy company at the time of its merger, which later merged with Danone’s fresh dairy division in Russia to become the leading dairy manufacturer in the CIS Region. Meridian Capital and its partners currently hold a substantial minority stake in the joint venture with Danone-Unimilk merged entity. Currently, Meridian Capital is supporting the expansion of Food Union in the Baltic States and other CIS countries.
Rīgas Piensaimnieks is one of the leading dairies in Latvia and Baltic countries with strategic focus on providing high quality, branded, fresh products with high added value. The Company operates with brands Kārums and Dzintars, which are recognized in all three Baltic countries. In 2014 Company has achieved turnover of EUR 33 million and exported its products in more than 15 countries globally.