Orkla is acquiring SladCo, a leading Russian confectionery manufacturer. The company will generate estimated revenues of approx. USD 160 million in 2004. SladCo Group has 4,000 employees.
The SladCo Group holds strong positions in a number of confectionery market segments in Russia. The group has production facilities in Yekaterinburg (Ural) and Ulyanovsk (Volga).
SladCo, which means "sweet" in Russian, was introduced to the Russian market in 2001 as both a brand and the company name.
Since 1997, the company's major owners have been funds managed by Baring Vostok Capital Partners, one of Russia's leading private equity firms. Personnel, including the managing director Garry Wilson, have agreed to continue working with the company after Orkla's acquisition. All top managers in SladCo have more than five years' experience in international companies or organisations, as well as many years' managerial experience in Russian companies.
With its population of 143 million, Russia is the largest country in Europe. Russia's market for groceries ranks as number five in Europe.
This is a major investment for Orkla in the Russian market. Orkla has annual revenues of USD 5 billion and is one of the largest listed companies in Norway. Orkla has a representative office in St. Petersburg, Russia.
"This investment is in line with Orkla's strategic long-term commitment to expand in Russia and Ukraine. SladCo is successful in a very important category to Orkla and provides a platform for further development in the Russian market. By taking ownership in this company, we are positioning ourselves in a growing Russian market, " says Håkon Chr. Andersen, director of Orkla's activities in Russia and Ukraine.
"SladCo is one of the most exciting companies on the Russian market at the moment. Baring Vostok has contributed invaluably to the success of SladCo. The enterprise now finds itself on a new competitive level where Orkla can add value as a strategic investor, which will drive new momentum to the development of the company and the brand, " says Garry Wilson, Chief Executive Officer of SladCo.
Commenting on the sale, Michael Calvey, Co-Managing Partner of Baring Vostok Capital Partners and former Chairman of the Board of SladCo, said: "We are very pleased with the outcome of our investment. Four years after initiating the project, SladCo has become one of the clear leaders in the Russian confectionery industry. We are confident that the joint efforts of Orkla and SladCo's excellent management team will carry the company to even greater success in the future."
United Financial Group (UFG), a Moscow based investment bank affiliated with Deutsche Bank, acted as sole financial advisor to Baring Vostok Capital Partners in this transaction.
The acquisition is subject to approval by the Russian Federal Antimonopoly Commission.
The parties have agreed not to disclose the acquisition price.
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Note to editors:
Orkla ASA acquires SladCo by purchasing the shares of a Dutch company, United Confectioneries BV from Baring Vostok Capital Partners. United Confectioneries owns 96.24% shares of OJSC "Confectionery Group "SladCo" and 50.57% of OJSC "Confectionery Factory "Volzhanka". Separately, Orkla acquires a 45.05% block of shares in OJSC "Confectionery Factory "Volzhanka" from minority shareholders. The two confectionery companies form a partnership, SladCo.
Confectionery Group SladCo was established in 2001 and is now one of the largest confectionery producers in Russia. SladCo produces all types of confectionery products: chocolate, biscuits, wafers, etc. SladCo has a 9% share of the Russian confectionery market. Estimated sales for 2004 to reach USD 160 millon, up 18% from 2003.
The Orkla Group is one of the largest listed companies in Norway. Core businesses are Branded Consumer Goods, Chemicals and Financial Investments. The company has 26 offices in Europe and CIS. Orkla is the leading supplier of branded consumer goods to the Nordic grocery market, holding many number 1 or 2 positions in strategically important product areas. The branded consumer goods business accounts for 80% of the company's turnover.
Baring Vostok Capital Partners is one of the leading private equity firms investing in Russia and the CIS, with over USD 400 million in capital under management. Baring Vostok has successfully invested in a broad range of companies within the oil and gas, branded consumer products, telecommunications, financial services, media and technology sectors. Baring Vostok Capital Partners is a member of Baring Private Equity International, a USD 2 billion global private equity group with activities in over 25 countries worldwide.