Diary

The merger of Heartland Farms has been announced with immediate effect resulting in a larger and stronger company operating together under Volga Farming.

Press Release 11.05.13

                                                                                              For immediate distribution

 In the Middle of a Financial Crisis Volga Farming Acquires Heartland Farms

 By acquiring Heartland Farms, a farming operation in the Penza region of Russia, Volga Farming turns the financial crisis into an opportunity.  Not only is Volga Farming gaining control over high quality productive farm land, machinery and well trained personnel, but the merger of the two organizations makes furthermore sense considering their complementary fields of expertise and the many areas to benefit from economies of scale.  When most competitors are either divesting or consolidating, Volga Farming is one of the few active players in a buyer’s market.

 The transaction which was done quickly and smoothly without any external advisors’ involvement, takes Volga Farming up from an excess of 40 000 hectares to an excess of 60 000 hectares of which most of the land is either in production or in a crop rotation scheme.  The transaction was an asset buy-out and no price of the transaction has been disclosed.

 

 Commenting about the transaction:

 Anne-Helene Ljungstrom of Volga Farming, an ex-McKinsey consultant, concludes,

” It was too good an opportunity to pass when one can acquire at a favourable price a well managed farm in Russia as a going concern, fully equipped with Western machinery and competent management with long experience farming in the region.”

 

Robert Monk of Heartland comments on his new stake in Volga Farming,

“I believe Russian farming provides an excellent investment opportunity and I believe the merged organization will offer me a better opportunity to realize the full potential of my investment.  Heartland brings long experience in land reclamation and actual farming in Russia with western technology to Volga Farming and Volga Farming possess a lot of finance and strategic expertise combined with expertise in land registration and agronomy.  Together the companies make a larger and stronger unit more likely to succeed and eventually become a public company. ”

 

Henrik Jonsson CEO of Volga Farming concludes,

“We are already seeding and fertilizing on Heartland’s land and the synergies between the two organizations are numerous.  I am personally very excited about the whole deal and about working together with the Heartland team.”

 

 About Volga Farming:

 Volga Farming was founded in 2007, at the beginning of the financial crisis.  Despite tough financial markets, Volga Farming managed to raise financing. The Third Swedish National Pension Fund and a number of private investors with experience from farming in Sweden or the UK as well as experience in investing in Russia became shareholders. Volga Farming’s strategy is to avoid first mover’s mistakes such as opportunistically acquiring derelict land and taking over farms with cattle or other obligations. Instead Volga Farming buys productive land with a preference for going concerns, quickly creating large continuous platforms with access to both trained people and machinery.  Volga Farming’s areas of expertise include land registration, agronomy, financial management, and strategy, in particular M&A. 

 

About Heartland Farming:

 Heartland was founded in 2000 by British real estate entrepreneur and visionary, Robert Monk, one of the first foreign investors in Russian farming.  Like most foreign investors, Heartland was only able to acquire derelict land as opposed to land in production.  They have spent large amounts of money and effort to reclaim the land and have suffered from the varying yields which are inevitable the first few years after land has been reclaimed and put into production.  In the mean time they have imported a Western fleet of equipment, built a well trained and low cost producing agricultural business lead by a British team combining expertise of large scale farming and grain trading. The Heartland team has years of experience in both reclaiming land and farming in Russia and their machinery knowhow is second to none. The financial crisis combined with low grain prices caused Heartland to struggle to raise additional capital needed to expand and decided to accept Volga Farming’s offer to merge the two organizations.

 

For inquiries please contact:

 Henrik Jonsson, CEO Volga Farming

Tel. +46-708-14 41 21

e-mail: henrik.jonsson@volgafarming.com