MG Baltic plans acquisitions in coming year - owner

MG Baltic, a Lithuanian diversified conglomerate, is planning to make acquisitions within the coming 12 months, President and sole-owner Darius Mockus said.

The company is looking at several undisclosed targets, he said. MG Baltic has been trying to acquire two of the targets for two years already, he added without elaborating on the details.

MG Baltic regularly receives target offers, one of the latest is a Scandinavian alcohol distributor, which it is currently analysing, Mockus said.

MG Baltic is interested in acquisition opportunities in its domestic market, as well as in Latvia, Estonia, Poland and also Western European countries and Northern Europe, he added. The company is looking for targets operating in fields of alcohol production and distribution, telecommunications, apparel retail, construction and real estate, according to Mockus. These are the main activities of the MG Baltic conglomerate, and each of them is looking for growth opportunities, he added.

MG Baltic could spend “hundreds of millions of euros” on the right acquisitions, but it only invests when it sees added value, Mockus said without specifying how much it would spend on the current targets. The company would use its own resources and bank loans for potential acquisitions.

It always uses financial and legal consultants for its M&A transactions, he added. The most recent acquisitions include buying a domestic alcohol producer Alita [VSE:AGP1L] in 2014, Baltijos TV in 2012, as well as a number of land plots for its future real estate projects in the Vilnius city in 2015, according to Mockus. Alita was acquired by MG Baltic’s subsidiary Mineraliniai vandenys for an implied transaction value of EUR 19.69m, according to Mergermarket data. Baltijos TV was acquired by conglomerate’s LNK TV for an undisclosed consideration.

MG Baltic reported EUR 539m in sales in 2015, with a net profit of EUR 22.3m. It reported a turnover of EUR 577.6m in 2014, with a net profit of EUR 13.4m.

Around 31% of its revenue comes from alcohol sales and distribution (company Mineraliniai vandenys), another 30% comes from clothing sales (Apranga [VSE:APG1L]), according to the data provided by a spokesperson for MG Baltic. Media and telecommunications (mainly LNK TV and Mediafon) bring more than 12% of its total revenue, close to 12% comes from construction services (Mitnija), another 11% of sales comes from alcohol production (Stumbras and Alita). Real estate projects bring the group around 5% of its sales.

MG Baltic controls 73 companies and employs 3668 staff. Around 26.7% of its revenue comes from exports.

MG Baltic is not divesting any subsidiaries now, according to Mockus.

Mockus said he is not considering the sale of MG Baltic at the moment. Mockus is now 51, according to public data. Theoretically, MG Baltic could be sold in separate divisions, not as a single group, when the time comes, he said, adding the exit would be easier this way. He would not elaborate on the potential exit timing.

By Agne Mazeike in Vilnius

mergermarket.com