Vilkyškių pieninė acquires Marijampolės pieno konservus

Vilkyškių pieninė, owned by Vilkyškių pieninė, one of the largest dairy processing groups in Lithuania „Vilvi Group“, buys the company „Marijampolės pieno konservai“ (MPK), which is experiencing financial difficulties. 

Vilkyškių pieninė announced on Thursday via „Nasdaq“ Vilnius Stock Exchange that it has signed an agreement with „Karpis“, the manager of Marijampolė, for the purchase of 90 100% of its shares, and the final number of shares will depend on the fulfilment of the terms of the agreement.

„The final price of the shares to be acquired will be determined after the completion of the financial due diligence procedure and after the assessment of the company's actual performance (...). Once the exact number of shares to be acquired and the final price have been determined, this information will be made publicly available," Vilkyškių pieninė said in a statement.

The transaction will be completed subject to the clearance of the Competition Council and the fulfilment of all other conditions precedent to the agreement, the company said. 

„Vilvi Group“ CEO and shareholder Gintaras Bertašius said that no radical changes are planned after the takeover of MPK – it will continue to produce canned milk, possibly increasing its volume. 

„There will definitely be an activity – basically milk processing. There will certainly be no change of substance, no change of output. Maybe there will be more of it, maybe some other sub-species, but basically the nature of the activity will remain the same," said Mr Bertašius.

When asked whether additional investments in the company are planned, the head of „Vilvi Group“ refused to comment, stating that it is "too early to say“."

In addition, Bertašius reiterated that Vilkyškių pieninė hopes to acquire 100 per cent of MPK's shares, but that everything will depend on the implementation of the terms of the agreement, which he did not disclose.

BNS reported in March that Vilkyškių pieninė in February acquired a claim to the outstanding liabilities of „Marijampolės pieno konservos“ and the Lukšių pieninė dairy owned by it to the main creditor Šiaulių bankas for an undisclosed amount. 

The agreement comes after the courts finally recognised that the will of Raimonds Karpavičius, the owner of MPK, who passed away in 2019, is legal, and disputes in the courts over the management of MPK and its manager, „Karpis“, are over.

In his will, R. Karpavičius left all his property to his second wife Aistea Karpavičienė and his brother Henrikas Karpavičius. 

MPK CEO H. Karpavičius told BNS last September that the company had reached an important agreement with Šiaulių bankas – the parties have agreed on the terms of settlement, according to which by the end of November 2024, MPK will aim to reduce its liabilities to the bank by €3.2 million, which amounted to €14 million. 

Vilkyškių pieninė, which made a net profit of €16.58 million last year, will pay a dividend of €6.45 million this year, or 54 cents per share. 

„Vilvi Group“ chairman and shareholder Gintaras Bertašius said earlier that the construction of a new cheese factory in Bauska, Latvia, worth more than €55 million, started last year. The project is the largest investment decision in the Group's history.

The Group currently employs around 1,000 people. 

BNS wrote that MPK is expected to report a profit before tax of EUR 1.1 million in 2024 (2023: loss of EUR 4.314 million) and earnings before interest, taxes, depreciation and amortisation (EBITDA) of EUR 3.1 million in 2023.

The company said last autumn that the decline in turnover was due to a change in its operating model – it produces part of its products on a contract basis, with the purchase of raw materials partly financed by customers – this model has allowed it to optimise its operations and significantly reduce the need for working capital.

The company has not yet submitted its accounts for 2024 to the Centre of Registers.

The Marijampolė company, established in 1977, produces canned and powdered milk, butter, cream and milk concentrate. According to the data of Sodra, the company employs 436 people.