It has been announced today that Origin Enterprises will be expanding their agri-services activities into a third country in Eastern Europe with the acquisition of two businesses in Romania, in crop protection and nutrition, for a combined cost of €54.4m.
 
Furthermore, they have simultaneously announced the disposal of its stake-holding in Valeo Foods for €86.6m (including a €42.5m settlement of its vendor loan notes).
 
Origin has received €86.6m in consideration for the disposal of its equity holding in Valeo Foods (€42.5m) and the full settlement of the vendor loan note (€44.1m).

Davy Stockbrokers believe that this represents a good return on the investment and is part of the group’s capital reallocation programme of recent years. The carrying value of Valeo at January 2015 was €67m including a cash equity amount of €22m.
 
According to Davy Stockbrokers, "The terms of trade in agriculture globally have disimproved with output prices under downward pressure. While the cumulative effect of the transactions will be EPS dilutive (c.2-3c) in the short term, the long-run opportunity for Origin in the region could be substantial."

Source: www.businessworld.ie