RIGA - Alta Capital, Estonia's rapidly expanding investment firm, announced last week that it has acquired an 80 percent stake in Rigas Piensaimnieks (Riga Dairy Farmer), one of Latvia's largest dairies. The acquisition was in the works for several months and is part of Alta Capital's ambitious plan to take over a range of brand name manufacturers and producers in the Baltics.
Indrek Rahumaa, a partner in the firm, said that Riga Dairy Farmer is an attractive asset due to its development potential in the dynamic Latvian market.
Riga Dairy Farmer was established in 1993 and is the third largest dairy in Latvia. The company has a product line of over 100 items, including the ubiquitous Karums curd snacks found in nearly all Latvian grocery stores. Last year the dairy's sales increased 25 percent to 25 million lats (35.6 million euros).
Edgars Stelmahers, chairman of Riga Dairy Farmer's board, said that the presence of Alta Capital will open new horizons for development. He said the new shareholders fully support a consolidation in the Baltic dairy industry.
Alta Capital now controls a growing range of brand name producers in the Baltics, including Lauma Lingerie, the Silvano Fashion Group, a clothes retailer, and Desseilles International, a high-quality lingerie fabric producer. Alta Capital has also moved into real estate and energy, and currently owns Alta Real Estate Partners and Latvijas Energocelt-nieks, which engages in major energy and telecommunication infrastructure projects.
Last week Alta Capital purchased a majority stake in Mieszko, a Polish confectionery with sales of 50 million euros in 2006.
Commenting Alta's strategy, Rahumaa said, "We believe that transforming local players into regional companies decreases the operational, sales and marketing pressures that smaller companies are facing due to the increased proportion of chain retailers and their bargaining power."
He added, "Considering its recent transactions, Alta Capital plans to carry on with its strategy, actively penetrating the Latvian market as well as increasing its exports to the neighboring countries."
Alta Capital acquired the holding in Riga Dairy Farmer by purchasing 100 percent of European Facilities Limited shares from financial investors.
According to information in the Latvian Business Register database, 80.07 percent of Riga Dairy Farmer shares belonged to European Facilities Limited, registered in the British Virgin Islands, while the remaining 19.93 percent belongs to Cayman Islands-registered DCEMF Holdings.
