The Danish company Brødrene Hartmann A/S (Hartmann Brothers), a former equipment supplier for Gotek’s moulded-fibre packaging factory in Zheleznogorsk, approximately 450 kilometers south of Moscow, has entered into an agreement with the shareholders of Gotek-Litar JSC for the acquisition of the company
“The acquisition of Gotek-Litar is a natural expansion of our activities in the growing markets of Eastern Europe and Russia, where demand for sustainable packaging is increasing,” says Torben Rosenkrantz-Theil, CEO of Hartmann.
“Gotek-Litar is a long-standing partner of Hartmann, and we will develop the company further and expand the factory substantially to exploit the growth potential in Russia where Hartmann is already serving several customers.”
The purchase price is DKK 116 million (approximately USD 18.5 million), with Hartmann increasing its annual investment forecast from DKK 450 million to DKK 600 million (USD 72 million — 96 million) and strengthening its earnings per share (EPS) immediately after closing.
The transaction is expected to be completed by the end of 2020. It is financed within the framework of the group’s existing credit facilities and will not affect its 2020 profit margins (Hartmann maintains 2020 guidance of revenue in the DKK 2.5-2.7 billion range and a profit margin of 15-18% before special items and restatement for hyperinflation).
“In recent years, in accordance with our differentiation strategy, the enterprises of our group have focused on what we consider to be the most important for our customers: service and innovation,” says Konstantin Kurov, CEO of Gotek Group.
“To ensure the development of the Gotek-Litar innovative component, operating in a narrow specialized market, we have decided to make a deal with Brødrene Hartmann A/S, the world’s recognized leader producing egg packaging.
“In addition to the accumulated sales experience, the company will receive most advanced production technologies, while the rest of the Group‘s operations will focus on the food and consumer goods markets, where cardboard and flexible plastics are the main packaging materials.
“The agreements reached with Hartmann allow us to assert that Gotek-Litar will continue to fulfill its obligations at all levels: to employees, customers, suppliers, public authorities and society.
“I am confident that the new Hartmann‘s family highly appreciates what Gotek gave to Litar, therefore, all contacts and projects with our Group will stay on a long-term basis. This is confirmed by service and integrity agreements we signed.
“No doubts that the new stage in the enterprise development will be no less striking than several decades of Gotek history.”
Currently Gotek-Litar has 250 employees and generated revenue of DKK 90 million and profitability at the level of Hartmann’s European packaging business. In 2019, the company had revenues of over USD 14 million.
According to the Danish company, Gotek-Litar is a leading manufacturer of retail and transport packaging for eggs. The production facilities at the company’s factory are based on machinery and technology developed and manufactured by Hartmann.
Gotek-Litar provides a good platform for long-term growth in the Russian market, where sales of eggs and egg packaging are driven by urbanization, retail development and an increased focus on sustainability.