Why Delta decided to sell to the Saranti brothers

By Giorgos Lampiris

A mature asset, for which the right time has come to take the next step in terms of its exploitation, was seen by the executives of the Vivartia group and the CVC Capital fund, regarding the sale of the Bulgarian subsidiary of Delta United Milk Company. As even sources close to Vivartia mentioned in a communication that had the Capital.gr together with them, Bulgaria’s move constitutes a transaction that serves both the interests and strategic planning of Delta on the one hand and the Hellenic Dairies group on the other. The interest in the case of United Milk Company is that it is a healthy business entity with a turnover of 52.5 million euros, an EBITDA of 5.15 million euros and a profit before taxes of 1.65 million euros within 2021. Additionally and according to the same sources the moves that have been made recently, both with regard to the signing of preliminary sales agreements at the Tavros and Plateos Imathia factories, as well as in the case of the sale of the United Milk Company, concern the utilization of inactive assets that were non-productive in the first two cases. With reference to the United Milk Company, they speak of a profitable move, from which a particularly satisfactory price was obtained in the case of Bulgaria.

Interest from CVC Capital to capitalize on the benefits of the Vivartia acquisition

The same sources disavow the term “divestment” of assets in relation to the latest business developments at Delta, arguing that any action on the part of the Vivartia group as well as CVC Capital Partners is carried out on the best. They even explain that on the part of CVC Capital there is an interest in capitalizing on the benefits of the course of the companies it has acquired through the acquisition of Vivartia, which happened in the case of Bulgaria. The sales of assets that have become known in the last period of time on the part of the Delta group contrast moves made in the domestic market with investments in Dodoni and the acquisition of a majority stake in the dairy industry of Ioannina as well as the acquisition of the commercial and import company of cheese products, Daniel Gatenius.

Delta’s goal is the domestic market and the development of the cheese portfolio

For its part, the Sarantis group has the possibility to expand further in Bulgaria, having already an expanded presence in the Balkans both with the already existing subsidiary company Tyrbul SA and in Romania. And on the other hand, Delta is reportedly seeking to create a large and complete dairy group, strengthening its position in cheese production where, unlike the Greek Dairies, it has limited dynamics. In fact, in this direction, the same sources claim that the acquisitions in Dodoni and Gatenio by Delta were also made, given their extensive activity in the production of cheese products. Delta’s goal is to grow more in the Greek market, while on the other hand, the Sarantis brothers’ group wants to further strengthen its presence abroad.

In the Balkans, the Hellenic Dairies group maintains, in addition to Greece and Bulgaria, an expanded presence in Romania through Fabrica de Lapte Brasov, in which it has planned to invest a total of 40 million euros until 2023 in order to add a new milk bottling line and equipment renewable energy sources. Fabrica de Lapte was created in 2011 with an initial investment of 55 million euros related to the development of the group’s new milk processing plant in Brasov, Romania. The total investment in this company and the production facilities during the last decade is estimated to exceed 150 million euros. In terms of revenue, Romania brought Hellenic Dairies group revenues of more than 110 million euros in 2021. Dimitris and Michalis Sarantis, owners of Hellenic Dairies, started operating in Romania as early as 1999, acquiring Tyrom SA at the time and at the same time they created their first factory outside the Greek borders.