Origin Enterprises to continue acquistions
Published 24/09/2015 | 02:30
Irish agri-services company Origin Enterprises is set to continue on its acquisition trail after recently agreeing to spend about €77m on three businesses.
It is understood that Origin believes it has enough flexibility on its balance sheet to spend about €150m to fund purchases if suitable acquisition opportunities become available.
The firm has recently been building its footprint in Eastern Europe. Last month Origin reached an agreement to spend €22.4m to acquire Polish agri-services business Kazgod group. The sale was funded with the proceeds of Origin's disposal of its interest in Irish firm Valeo Foods.
Origin offloaded its 32pc stake to London-based private equity company CapVest Partners for a total cash payment of €86.6m. The divestment was announced on the same day that Origin said it had reached a deal to buy two Romanian-based agronomy firms for a combined price of €54.4m.
Chief executive Tom O'Mahony said that Origin "absolutely will continue looking" for acquisitions, adding: "We are focused on developing a pan-European footprint." He said the firm "would be particularly looking at Eastern Europe and existing markets like Ireland and England" and elsewhere.
The firm had committed banking facilities of €430m as of the end of July. It also had just under €90m in cash, although a large amount of this is likely to be used to pay off the balance of the acquisitions agreed earlier this year. It is understood that the group is most likely to raise debt to finance future buys.
Mr O'Mahony also said that the company has a "cautious outlook for the coming year. It is largely because of global oversupply." He was speaking after the company yesterday reported a 3pc year-on-year increase in revenue to €1.46bn for the year to the end of July.
That compared to sales of just under €1.42bn in its 2014 financial year. Group operating profit was €93m compared to €92.9m the year before while profit before tax rose by 0.9pc from €87.4m to €88.2m. Shares in the firm were down by just over 5pc in mid-afternoon trading in Dublin yesterday.