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ZF English

Valvis sells LaDorna group to French giant Lactalis

Almost six years after Jean Valvis sold Dorna mineral waters to Coca-Cola, the businessman has conducted his second major exit, selling his dairy business.
Valvis, the creator of the Dorna brands, has sold the LaDorna dairy business to French-based global giant Lactalis, in a deal worth 70-90 million euros. The takeover was signed on April 16 and marks the second exit from the Dorna business (mineral waters and dairy products), which was created by Valvis, a Swiss entrepreneur with roots in Greece, who first came to Romania in 1992. Valvis sold Dorna to Coca-Cola a few years ago for 40 million euros.
Lactalis is the world's second-largest dairy producer and first on the European market, with an annual volume of 10 billion euros. LaDorna is one of top five dairy companies in Romania.
The Lactalis name has been used in connection with a number of independent players in the domestic industry over the last few years, which were said to be up for sale. With the acquisition of LaDorna, the French at Lactalis have directly entered a one billion-euro Romanian market, whose medium-term potential is 3 or 4 billion euros.
"The deal was done relatively quickly; in January we signed a memorandum of understanding and closed the deal on April 16. The transaction will be subject to the Competition Council's approval. The talks weren't easy, especially because this is a complex deal whereby I sold Dorna SA, Dorna Lactate, and Dorna Helas, the distribution company established in Greece," Jean Valvis told ZF.
Valvis would not reveal any details about the value of the deal.
However, according to ZF's estimates, the deal is worth somewhere between 70 and 90 million euros, considering that the exit also entailed the sale of the distribution company in Greece. LaDorna ended last year with turnover worth 38 million euros, which is close to the 2006 level, and an operating income worth 4 million euros. In comparison, Danone Romania, whose business stood at 87 million euros in 2006, was appraised by Capital Partners investment firm at 185 million euros, according to "The most valuable companies in Romania" ZF yearbook data, taking into account a 11.4 multiple of the operating income. According to the same source, no other company was worth more than 120 million euros judging from the balance sheet for 2006.
Valvis, who after he sold the Dorna mineral water business to Coca-Cola in 2002, kept the dairy business, says talks were held with five companies, four of which were strategic players and Lactalis was the last to join the race. "It was their determination that mattered," says Valvis, particularly because in 2007, another operator, whose identity he will not reveal, was extremely close to concluding the acquisition of a stake in LaDorna.
"They even did due diligence, but it wasn't meant to be," he says.
Moreover, Valvis admits he was looking for an exit, while that strategic operator wanted 25-35% in the company.
"I wanted to exit because I still feel creative and want to continue to invest in my future, as I did after the sale of Dorna mineral waters," he adds.

 

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