SweDeltaco expands to the Baltics – acquire leading Lithuanian distributor.

SweDeltaco AB has signed an agreement to acquire 100 % of the shares in UAB AG Trade, a leading Lithuanian distributor of white goods and consumer electronics, from UAB Topo Grupe. The acquisition is expected to be finalized on 14 May 2014.

The acquisition is of strategic importance for SweDeltaco. By acquiring AG Trade, SweDeltaco will establish a foundation for further expansion in the Baltic region. AG Trade has 14 employees and is a well-established distributor in primarily Lithuania and Latvia.

As a part of the agreement with UAB Topo Grupe, commercial agreements have been signed with UAB TC Prekyba, a subsidiary to Topo Grupe and the leading consumer electronics chain in Lithuania with 33 stores and a long history as customer to AG Trade. These agreements include far reaching mutual commitments and incentives for the parties to establish and expand the product portfolio of SweDeltaco including companie’s private label brands DELTACO and Streetz in the Baltics.

In 2013 AG Trade had a turnover of 39.3 MLTL (102 MSEK) and showed a profit before depreciation (EBITDA) of 1.8 MLTL (4.6 MSEK).

The agreed cash consideration consists of an initial purchase price to be paid at closing and an additional purchase price to be paid during the coming three to four years based on purchase volumes made by TC Prekyba from AG Trade.

The initial purchase price is calculated as three times average EBITDA in AG Trade 2012/2013 and the additional purchase price will not exceed one time the average EBITDA in AG Trade 2012/2013.

AG Trade will be consolidated in the Deltaco Group Financial Statement as from 1 April 2014. The acquisition is expected to give a small positive contribution to profit per share already the first year. The goodwill value related to the acquisition and including 100 % of the additional purchase price will be approx. 10 MSEK. The acquisition will be financed by internally
generated funds. 

Comment from Siamak Alian, Managing Director of SweDeltaco AB and CEO of the Deltaco Group:

“AG Trade gives us a unique opportunity to establish SweDeltaco products, including our exclusive brand names DELTACO and Streetz, in the Baltics which we regard as a prioritized market. AG Trade is well-established and has a leading position and strong customer relations with major retail chains in the Baltic region including TC Prekyba and RD Electronics. The acquisition is made with a limited financial risk but with great future potential for SweDeltaco through the local partnership established with TC Prekyba and Topo Grupe”.

Aurelijus Rusteika, founder, owner and chairman of Topo Grupe: “We are very happy that SweDeltaco will be the new owner of AG Trade. With SweDeltaco as owner we are confident that AG Trade will be able to expand the business in the Baltic region. It will also open up great opportunities for our own stores to offer an attractive product portfolio in the IT- and consumer Electronics segment in close co-operation with SweDeltaco and AG Trade. We see this as a strategic alliance where all parties involved will be winners”.