Sweden-based poultry company Scandi Standard has acquired an unnamed vertically integrated poultry meat company in Lithuania.
For a cash sum of EUR23.5 million (US$26.0 million), Scandi Standard has acquired the integrator's assets and business.
Vendors are a group of local businesses, and the purchase comprises a modern processing factory, poultry farms and land.
Neither the current name of the company nor its location were disclosed, but Scandi Standard describes the site as “geographically favorable.”
Already in 2025, the new owners are forecasting an annual output of products between 20,000 and 25,000 metric tons (mt; grill weight, GW).
Completion of the deal is expected during the fourth quarter of this year.
In addition to the purchase price — which will be financed through Scandi Standard’s credit facilities — the Swedish firm is planning on a further EUR5- to 7-million investment in working capital and equipment once it takes over the facility. The new operation will be integrated into the existing ready-to-cook (RTC) business.
Potential to build stronger business
For Scandi Standard, benefits of this latest acquisition are the potential to operate a state-of-the art processing plant at less expense than replacing an existing facility, and in a country where production costs are relatively low, while product quality standards are high.
Furthermore, it offers opportunities for expansion to raise the level of poultry self-sufficiency for the plant. Currently, its farms generate 6,000-8,000mt in poultry meat (GW) per year.
For Jonas Tunestål, CEO of Scandi Standard, the proposed transaction also fits well into the group’s current business and future strategy.
“This deal is a significant step in the strengthening of Scandi Standard's overall business, and a catalyst to reaching our financial targets,” he said. “In addition to having the best prospect for acting as a competitive, high-quality, supplier in its own right, it will allow us to better service the most price-sensitive segments in our home markets, and represent a cost-competitive supplier meeting the strict raw material criteria of our Ready-to-eat activities.”
Tunestål went on to express the expectation that the newly acquired Lithuanian company will be “moderately loss-making” over the first six to 12 months. Subsequently, he forecasts a better margin potential for this business than for the group’s current operations.
More on Scandi Standard
According to the web site of Scandi Standard, the Sweden-based group is a leading manufacturer of chicken meat product in the Nordic region and the Republic of Ireland. It produces, markets, and sells ready-to-eat, chilled and frozen products under a number of brands — including Kronfågel, Danpo, Den Stolte Hane, Manor Farm, and Naapurin Maalaiskana. The group’s Norwegian business also produces and sells table eggs. With a workforce of around 3,200, it generated sales of over 13 billion Swedish krona (SEK; 1.25 billion) in the last fiscal year.
Annual slaughterings of over 177 million birds put Scandi Standard easily among the top 20 largest poultry companies in Europe, according to the WATTPoultry.com Top Poultry Companies survey. The group also has around one million laying hens.
In its latest financial report, the group reports a year-on-year improvements in operating income and margins for the first six months.
Within the last month, Scandi Standard has announced it had negotiated a five-year loan of SEK3.2 billion to support the group’s future growth.
