Agro-Region sold to Kernel without price reduction despite war risks

The sale of Agro-Region to the Kernel agricultural holding took place without a price reduction despite the war risks.

This was stated by the former majority owner of the company Aivaras Abromavicius during the Forbes Ukraine Business Breakfast, Interfax-Ukraine reports.

According to him, the deal to sell Agro-Region was the result of an almost 20-year investment cycle and went through without revising the price parameters despite the war risks.

“From beginning to end, the deal went through absolutely clearly, without negative changes. It is important to emphasize that Kernel did not worsen the conditions at the last moment. When we drew up the conditions, we did not look at shelling or captured territories. From the buyer’s side, it was a pleasant moment: we did not sit every week and watch whether there was an advance of enemy troops somewhere in order to reduce the price because of this,” Abromavicius commented.

He declined to name the exact amount of the deal, but noted that the $120 million figure was “inaccurate” and “too much.” Abromavicius clarified that the asset’s value before a full-scale war would have been “plus or minus the same,” since the price of agricultural companies in Ukraine is based not on EBITDA, but on the value of assets: lease rights, equipment, and elevators.

At the time of the transaction, Agro-Region operated 41,000 hectares of land in Kyiv, Chernihiv, Zhytomyr, and Khmelnytskyi regions. The holding’s technological base included a modern fleet of agricultural machinery, its own grain trucks, and elevator capacity for 200,000 tons. Corn yields were consistently 10-11 tons per hectare, wheat 6-8 tons, and sunflower 3.5-4 tons. Such results were achieved thanks to full digitalization and its own logistics department.

According to Abromavicius, this deal reflects the market trend: companies with large processing will look for assets with a large land bank.

As a reminder, at the end of January, shareholders of one of the largest agricultural holdings in Ukraine, Agro-Region, completed a deal to sell 100% of the company to the Enselco group, owned by Andriy Verevskyy, the owner of Kernel. The deal became one of the largest M&A transactions in the agricultural sector of Ukraine, carried out since February 2022. The exclusive financial advisor to the sellers was the investment company Dragon Capital, and legal support was provided by OMP.