BillerudKorsnäs, Solna, Sweden, has signed an agreement with AS Graanul Invest, Tallinn, Estonia, concerning the sale of its shares in SIA Latgran, a Latvian-based pellets producer with annual volumes of 497,000 metric tons and sales of EUR 73 million in 2014. BillerudKorsnäs’ ownership in Latgran is 75%, and the remaining 25% is owned by Baltic Resources Ab. The total consideration for 100% of the company amounts to EUR 104 million on a cash and debt free basis, corresponding to a multiple of seven times Latgran’s EBITDA for 2014. 

Per Lindberg, CEO of BillerudKorsnäs , said that "Latgran has shown a strong sales and earnings development during our ownership and has been a great investment for BillerudKorsnäs. Meanwhile, BillerudKorsnäs has increasingly evolved towards a more focused company, working with renewable packaging material and solutions that has become our core business. The sale of Latgran is in line with our strategy and will enable us to continue to develop our core business. At the same time, the transaction strengthens Latgran’s ability to further develop its pellets business together with Graanul." 

The transaction is expected to close this July, provided that certain closing conditions are fulfilled. 

AS Graanul Invest is a privately owned company, established in 2003, and focuses on forestry, development of bioenergy and the production of renewable energy. The company has since inception shown strong growth and is currently the biggest producer of pellets in the Baltic countries and the second largest in Europe with an annual production capacity of 853,000 metric tons.

 

Latgran, established in 2004, is a producer of utility grade pellets, employing 123 people and producing pellets at its four factories. The company generated sales of approximately EUR 73 million in 2014. The vast majority of production is exports primarily to major electricity and regional thermal energy producers.