Clarifications regarding the sale of its participation in the consortium with The Estee Lauder Companies were made by the company Gr. Sarantis, following the 1583 / 27.06.2022 letter of the Hellenic Capital Market Commission.
In particular, the listed company states in its announcement:
1. On 15.06.2022 the agreement for the sale of 49% of the company ELCA to Estee Lauder Europe was signed, after negotiations of the parties that reached a mutually beneficial agreement. The agreement is not conditional. The terms of the agreement are normal terms of sale of shares. The sale took place and part of the price has already been paid. Specifically, the amount of 14 million euros has been paid on 16/06/2022, while the repayment will be made in two equal installments of 20.6 million euros in January 2025 and January 2028. Mr. Grigoris Sarantis , will work with and assist Estee Lauder during the transition period, for a period of one year.
2. As it has become known, with the announcement of the Company of 30/7/2019, the percentage of the Company’s participation in the joint company with Estee Lauder (JV) would be gradually reduced to 40% for the years 2022-2024 and to 15 % for the years 2025-2027 with our final departure after the issuance of the financial statements of 2027. The agreed price is therefore considered very satisfactory as it finalizes the eligible amounts reducing the risk of our Company from possible future negative fluctuations of the business environment. In addition, a) by using the above funds, the Company can support its investment acquisition program in the field of its strategy and b) seek strategic partnerships in the competitive environment of cosmetics and perfumes.
3. The Company is not aware of any management audit carried out on JV and its subsidiaries until the date of sale.
4. The Group is already in the process of replacing the profitability of the consortium by immediately implementing a specific strategy that concerns on the one hand the strengthening of the Group’s acquisition plan and on the other hand the conclusion of new representation agreements. With regard to acquisitions, they have specific criteria in order to provide synergies, contribute to profitability, and offer added value. They focus on the strategic categories of the Group, ie personal care & care products and home care products, the countries of activity of the Group and the network covered by the Group.
In particular, the agreement for the acquisition of the Polish household products company Stella Pack SA has already been announced https://sarantisgroup.com/en/nea/eksagora-stella-pack-polonia/, which is approved by the competition authorities on countries of activity of the Stella Pack, which is expected to be received at the beginning of Q4 2022.
More specifically, STELLA PACK, with a leading position in the production and distribution of household items and 25 years of successful presence in the categories of food packaging, garbage bags and cleaning tools, recorded last year annual sales amounting to 65 million euros and presented EBITDA amount 8.5 million euros.
Due to the homogeneity of the Group with the acquired company, synergies will be utilized at all levels of the company, from sales, administrative services, warehouses and factories. Therefore, this acquisition is expected to add significant added value to the Group and it is estimated that in 2023 total EBITDA, including synergies, will amount to at least € 12 million per year, exceeding JV’s potentially expected profitability of at least € 150. %.
At this point it is recalled that the expected future profitability of the JV was to be in any case, reduced compared to the past as as mentioned above the participation rates of our Company in the joint company would be gradually reduced.
At the same time, other acquisition targets are examined, which are compatible with the Group’s strategic activities and criteria.
In addition, the Group increases its chances for distribution partnerships with cosmetics companies abroad, something that was not possible in the past. This creates significant prospects for enriching the portfolio and further developing the Group’s profitability.
Source: Capital
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