Darby Overseas Investments has announced that its Darby Converging Europe Mezzanine Fund has made an €8 million ($10 million) investment in AS Rigas Piensaimniekes, a dairy products producers in Latvia.
Headquartered in Riga, the company is Latvia’s third-largest dairy business. It was founded in 1993 and makes a full range of dairy products for local consumption as well as for export throughout Europe and North America.
According to Darby, the dairy market in Latvia and the other Baltic states is considered to be in expansion mode due to expected increases in consumption along with growing disposable income. The industry enjoyed good growth in 2004 and 2005, mainly due to price increases. Despite the price increases, consumption remained stable.
Latvia itself has also been experiencing extraordinary growth along with the other Baltic states. In 2005 real GDP in the country grew 10.2 percent and unemployment declined to 9.3 percent by the year’s end. Since its entry into the EU in 2004 the Latvia government has been working to foster rapid growth.
This is the first investment made by the Darby Converging Europe Mezzanine Fund since its closing on 1 November 2005. Darby is the private equity arm of Franklin Resources, a global investment management organization operating as Franklin Templeton Investments. The San Mateo, California-based company has $505.6 billion in assets under management.