Agri-services group Origin Enterprises has announced it is to acquire two separate Romanian-based agronomy and input-supply business, Redoxim and Comfert, for a combined €54.4m.

Redoxim, which is headquartered in Timisoara in western Romania, is described as a leading provider of agronomy services, macro and micro inputs to arable, vegetable and horticulture growers that was founded in 1991.

Origin will acquire 100% of the business for a cash payment of €35m with the deal expected to be completed in September this year. Upon completion of the deal, €31.5m will be paid up front with a further €3.5m payable a year from then.

For the 2014 financial year, Redoxim recorded sales of €53.6m with an operating profit of €5.6m. The business employs over 190 people, servicing over 2,000 customers through a distribution network of 55 retail outlets and a team of 50 agronomists and product specialists.

Geographic spread

Comfert, the second business that Origin is to acquire, is based on the opposite side of Romania in the eastern city of Bacau. Origin will pay an initial fee of €19.4m for the business, however additional fees may be payable based on the future performance of the business over the next five years.

The deal will be subject to clearance from the Romanian Competition Council but is expected to be completed sometime in October.

Comfert was founded in 1998 and is also described as a leading input and agronomy services provider for 1900 largely intensive growers. The business recorded sales of €100.6m for its 2014 financial year making an operating profit of €3.2m.

Origin chief executive Tom O’Mahony described the acquisitions as an “excellent strategic fit” for the group. “The transactions underline Origin’s strategic priority to scale its technology and service portfolios in new markets with favourable agronomic application opportunity,” added O’Mahony.

Both deals will be funded from existing bank facilities and the group expects Redoxim and Comfert to start contributing to Origin’s earnings from 2016 onwards.

Disposal of Valeo stake

Origin has also announced the disposal of its 32% stake in Valeo Foods, the Dublin-based consumer foods group. Origin said it had disposed of its stake for a cash payment of €86.6m to the London-based private equity firm CapVest.

Origin and CapVest jointly established Valeo Foods in 2010 through the merger of leading food companies Batchelors and Origin Foods. The merger brought together a number of iconic food brands including Batchelors, Erin, Shamrock, Roma and Odlums, with sales in Ireland, the UK and Europe.

CapVest will pay €42.5m for Origin’s 32% shareholding with a further €44.1m for the settlement of a vendor loan note issued by Origin at the time of the formation of Valeo.

Origin chief Tom O’Mahony said the disposal of its stake in Valeo would allow the group to enhance its focus on its strategic agri-services business. The proceeds from the disposal will be used initially to reduce net debt but will ultimately be invested in Origin’s agri-services division.