Financial Services, Latvia, Legislation, Markets and Companies, Medicine, Mergers and take-overs

“Acquisition of Tonus Elast is so far the biggest project related to expansion of Olainfarm group. We believe that all the synergies, new markets, improved product portfolio and joined experience will ensure a more dynamic development of Tonus Elast and the entire group,” said Valerijs Maligins, Board Chairman of Olainfarm.

Antons Marcenko, Head of Project Funding Unit at ABLV Bank said that a long-term loan for a producer that makes export-oriented products confirmed the bank’s trust in the client’s business model, management team and shareholders. ”This sizeable transaction is a good indication about the investment climate in Latvia – as the local capital is playing an increasing role in development of Latvian economy and improving competitiveness of Latvian companies abroad. We expect that further growth of our loan portfolio will also be predominantly ensured by lending to Latvian based companies,” he said.

Olainfarm signed the agreement about acquisition of Tonus Elast for EUR 14 million on May 12 this year.

Tonus Elast was established in 1995 and is a producer of elastic medical products, from elastic bandages to complicated corsets for pregnant and lactating women. It has more than 100 products in its product portfolio. The production plant in Nica, western Latvia, turns out over 11.2 million items annually, of which 11% are sold in Latvia and 89% exported to 35 world countries. The main sales markets are CIS and EU countries, India and the countries in the Middle East.

According to Firmas.lv, Tonus Elast reported a profit of EUR 1.51 million on a turnover of EUR 6.88 million in 2014.

Olainfarm group posted EUR 15.3 million in net profit for 2015 which is a 25% growth year-on-year and by 8% more compared to the net profit of 2012, when the previous profit record of EUR 14.2 million was set. The parent company’s profit in 2015 increased 28% from 2014 to EUR 14.6 million.

Olainfarm shares are quoted on the Main list of Nasdaq Riga stock exchange. The company’s biggest owner is its board chairman Valerijs Maligins.