November 30, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Here’s something we don’t speak of often – buckwheat. Did you know that buckwheat is not a form of wheat?  And is, in fact, not a grain, or even a grass, but a type of seed (called a “groat” – simply meaning a hulled seed) harvested from plants that are related to rhubarb? I didn’t either!

Shaped like a pyramid, buckwheat is a member of the “pseudocereal” family, or foods that are processed and consumed as if they were grains, but are not. It is a gluten-free crop that is high in fiber, minerals (including copper and magnesium), and contains rutin – a compound found in apples and citrus fruit that may have vascular benefits. 

The crop grows quickly and is able to thrive in poor soil, making it a natural weed suppressor due to competition and shading, and is regenerative as it is beneficial for pollinators and adds phosphorous to the soil, making it a good cover crop.

And although not a grain, as a “pseudocereal”, buckwheat is often processed into a type of flour used to make pancakes, soba noodles, and some types of bread. It also can be used as an alternative for whole grains in porridge, or as a rice substitute.

So, why are we learning the basics about buckwheat? Because INVL Baltic Sea Growth Fund, the leading private equity fund in the Baltic region, announced it has agreed to acquire 100 percent of Galinta Group, one of the largest producers of buckwheat in Europe, and one of the leading Baltic producers and traders of flakes, rice, and other groats.

“We believe that the plant-based food sector has strong potential for growth and Lithuania demonstrates a competitive advantage in the field of food processing, especially in the grain segment,” said Deimantė Korsakaitė, managing partner, INVL Baltic Sea Growth Fund. Therefore, it has represented one of the strategic sectors we have looked at for potential investment since the fund’s establishment.”

Currently employing more than 100 people in Lithuania, Galinta Group generated EUR38.5 million (US$41.9 million) in revenue in 2022 with production capacity of 1,000-1,500 tons per month and packing approximately 8 million units per month. 

“Galinta Group has been successfully operating in the market for more than two decades and holds a significant position for the production of groats and flakes as well as commercial activities across the Baltics and Europe more broadly,” said Marijus Mazuch, shareholder, Galinta Group. “I strongly believe this transfer to professional investors will now allow the group to continue growing and further strengthen its already impressive market.”

This acquisition marks the ninth portfolio investment from the INVL Baltic Sea Growth Fund – a EUR165 million (US$179.6 million) investment vehicle with the European Investment Fund (EIF), a part of the European Investment Bank, as its anchor investor.

The fund aims to build a diversified portfolio of companies demonstrating the ability to succeed amid increasing global competition and market volatility through targeted majority, or significant minority stakes, via investments ranging from EUR10 million (US$10.89 million)-EUR 30 million (US$32.66 million), and geographically, is targeting Baltic countries and their neighbors including Poland, the Nordics, and Central Europe.

Managing the fund is INVL, the leading Baltic investment management and life insurance group whose companies manage pension and mutual funds, life insurance, individual portfolios, private equity, along with other alternative investments for more than 300 clients in Lithuania, Latvia, and Estonia, as well as international investors. With a track record reaching back 30 years, INVL has grown into a true market player with more than EUR2 billion (UA$2.18 billion) in AUM. 

“We are glad to be entrusted with the further growth and development of this successful family-built business, which in more than twenty-five years has become the undisputed market leader with its brands are well-known amongst the buyer community,” said Deimantė Korsakaitė, managing partner, INVL Baltic Sea Growth Fund. “The business has the potential for rapid growth by both increasing volumes in existing markets and expanding into the new ones as well as the launch of new product segments.”

Korsakaitė explained INVL’s approach to achieving growth in the region’s food sector, saying, “We strive to grow regional leaders and provide consumers with high-quality and healthy food at affordable prices thus we are actively working with other acquisitions in this area as economies of scale and possible synergies are the essential condition for ensuring business competitiveness internationally, modern and efficient production, and the development and introduction of new products into the markets.” 

“Sustainability is gaining more and more leverage in society today. Therefore, post-acquisition we will not only target product development but also strengthen sustainability-related initiatives in the company’s day-to-day activities. We strongly believe that incorporating sustainability initiatives into the business model encourages management to follow a path of innovation and adopt sustainable yet effective business solutions.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.