Origin continues recent acquisitions trail after buying second Polish business

Origin Enterprises, the agri-services group, has announced it is to acquire the Kazgod Group, a Polish agronomy business, in a deal worth €22.4m.

Kazgod employs more than 200 people and provides inputs and agronomy services to 2,600 farmers in central and eastern Poland. For its full financial year in 2014, Kazgod recorded earnings (EBIT) of €1.2m from a turnover of €200m.

Origin says the business will augment its existing Dalgety business in Poland.

Origin chief executive Tom O’Mahony said the acquisition of the Kazgod business would provide significant potential for scale expansion in Eastern Europe.

“The combination of Kazgod and Dalgety will bring benefits through new customer extension opportunity, and an enhanced capacity for the development of new and innovative service propositions,” added O’Mahony.

The acquisition of the Kazgod Group is not expected to contribute meaningfully to forecasts in the year ending July 2016. However, synergy benefits are expected to accrue over a three-year target period. The acquisition continues a busy period for Origin Enterprises. Last month, the group acquired two separate Romanian-based agronomy businesses for a combined €54.4m.

At the same time, Origin announced the disposal of its 32% stake in Valeo Foods. Origin sold its Valeo stake to the London-based private equity firm CapVest for a cash payment of €86.6m.

Both the acquisition of the Kazgod Group and the two Romanian businesses will be funded from the proceeds of the Valeo Foods divestment.

When these latest acquisitions are fully integrated into the business, it is likely they will increase annual turnover to the region of €1.7bn.

The businesses in Romania and Poland, coupled with the disposal of the stake in Valeo, mean that Origin’s business is now firmly focused in the agronomy and agri-services sector.