Disposal of IPM Potato Group Limited

 Disposal of IPM

Donegal Investment Group ("DIG") announces that it has reached agreement to sell its seed potato businesses, IPM Potato Group Limited, AJ Allan Limited, IPM Portugal Limited, IPM France Limited, IPM Holland Limited and IPM Kenya Limited, collectively referred to as "IPM" to the Royal HZPC Group ("HZPC") ("the Disposal").

HZPC is an international market leader when it comes to potato breeding, seed potato trading and product concept development based in the Netherlands

IPM is an agile and innovative agri-tech business developing potato genetics to create value-added varieties. Seed production takes place in dedicated growing areas including Scotland, England, Ireland, France, Holland and Kenya. IPM has over 40 proprietary potato varieties including names such as Rooster, Burren, Banba, Slaney, Nectar and Electra which it produces and exports to over 40 countries world-wide.

In the year ended 31 August 2024 IPM had Profit After Tax of €2.3m. The carrying value of IPM in DIG's annual report for the year ended 31 August 2024 was €12.4m.

The overall transaction value for IPM is:

(1) €16.5m of cash consideration (including €2.5m to be held in Escrow for 2 years) on completion ("Initial Consideration"), subject to customary completion accounts adjustments, and

(2) A further contingent deferred cash consideration of up to a maximum of €4m dependent on the financial performance of IPM for the period 1 September 2025 to 31 August 2027, inclusive ("Deferred Consideration").

Subject to completion of the Disposal it is expected that a substantial proportion of the proceeds will be returned to shareholders in due course in line with previous practices.

Commenting on the transaction, Mr. Geoffrey Vance, Chairman of DIG stated that the disposal of IPM at this stage is in the best interest of all shareholders and provides IPM an opportunity to grow further within the market leading Royal HZPC group. He thanked the management and staff at IPM for their great work over the last few years and wishes them well for the future.

The Disposal is subject to:

· Approval by certain competition authorities

· Approval by shareholders of Donegal Investment Group

The board of directors of DIG will shortly call an Extraordinary General Meeting to propose the sale of IPM to Royal HZPC Group. A circular will be prepared and sent to shareholders providing further details on the Disposal.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

END

Contacts

Mr. Padraic Lenehan

Director

Donegal Investment Group

Tel: 0749121766

Anthony Farrell

Davy Corporate Finance

Tel: + 353 1 679 6363

This Announcement contains inside information and has been issued pursuant to Article 2.1(b) of Commission Implementing Regulation (EU) 2016/1055