Deal for Greek Dairies and Delta with acquisition in Bulgaria

By Giorgos Lampiris

The Hellenic Dairies group of the Sarantis family is proceeding with the acquisition of the subsidiary of the Delta dairy company in Bulgaria, the United Milk Company, according to secure and cross-referenced information. This specific move essentially strengthens the production base for the Hellenic Dairies group in the neighboring country. We remind you that the first step for the brothers Michalis and Dimitris Sarantis in Bulgaria was with the acquisition of Tyrbul SA in 2003 and the construction of a factory for the production of yellow cheeses.

The official announcement of the agreement is expected within the day, while for the Sarantis group this new move comes just a few days after the announcement of another agreement in Cyprus, with the acquisition of a 49% stake in the local dairy industry of Kourousii, acquiring in this case the right to exercise of the management but also with a provision for the acquisition of the remaining 51% of the shares of the specific company in a second year. This specific move was the next step of the already existing commercial activity in Cyprus as well as the construction of a new halloumi production plant in Nicosia.

For Delta, the sale of United Milk Company is another move to divest its assets, after the recent announcement of the sale of its factories in Tavros, Attica, with The Mart of the Sklavenitis family as the buyer, as well as its factory in Plati Imathia, there where in the past it was produced in “Vlachas” evaporated milk, for a foreign investor.

Delta’s financial figures outside of Greece

To understand the size of the company in Bulgaria, the non-Greece image of Delta’s sales in 2021 was at the level of 71.2 million euros as they increased by 12.2% compared to 2020, mainly coming from the course of the subsidiary United Milk Company of Bulgaria. It should be noted that the percentage of Delta’s exports is in the single digits of its total turnover and therefore contributes, but to a limited extent, to the aforementioned amount.

United Milk Company is headquartered in Plovdiv (Philippines), which is the second largest city in Bulgaria, with a population of 341,000. The company has been active for more than 50 years in milk processing.

What does UMC produce?

The category of fresh dairy products coming out of its factory includes the VERIA group of traditional Bulgarian dairy products which includes fresh milk and yogurt, the FIBELLA product range which includes fruit flavored milk and yogurt, highly pasteurized milk and cream, as well as the ranges of Vitalact, Khansko and Russalka products. In its range of cheese products, UMC produces a variety of cheeses from cow’s, sheep’s and goat’s milk. It operates both locally and abroad with sales in the USA, Australia, Lebanon, Canada and Russia.

The Sarantis brothers’ group achieved a turnover of 427 million euros in 2021 from 405 million euros in 2020, making it currently the country’s largest dairy industry based on turnover. The group’s portfolio includes names such as Olympos, Rodopi, Tyras, Doumbia, Kiafa and finally Agno, which it acquired through an auction last March.

Delta’s loans and financials

As for Delta, the turnover of the group owned by the Vivartia group amounted to 279.57 million euros in 2021 from 275 million euros in 2020 with a net profit of 2.94 million euros for 2021, against a loss of 751 thousand euros in 2020.

Delta at the end of 2021 held borrowings of €146.2 million at group level, of which €124.98 million corresponded to long-term loans and the remaining €21.2 million to short-term borrowings.

Also, Delta and Vivartia went ahead last year in cooperation with the Banks to restructure bank lending. Thus, in July 2021, the new Joint Bond Loan of €131.6 million was signed, which was fully covered by the banks. The disbursement was completed in December 2021 and the new loan was used to refinance DELTA’s existing bond loan and to partially repay VIVARTIA’s existing bond loan by 50%.