SARANTIS GROUP PROCEEDS TO THE ACQUISITION OF THE POLISH BRAND KOLASTYNA

Sarantis Group announces the acquisition of the Polish brand KOLASTYNA.

More specifically, Sarantis Group, in the context of strengthening its presence in the Eastern Europe and in order to meet its strategic goal of becoming the leading consumer products company in the region, signed on 30/06/10 an agreement for the acquisition of the brand name and the intellectual property of KOLASTYNA, through its Polish subsidiary SARANTIS POLSKA S.A.

KOLASTYNA’s product range includes face and body care cosmetics as well as sun protection products. KOLASTYNA is a traditional brand in the Polish market with over twenty years of history.

The transaction cost amounted to 9.5 mil. PLN.

Sales from KOLASTYNA amounted to c. 28 mil. PLN during 2007, while in 2008 and 2009 sales were equal to c. 26 mil. PLN and c. 11 mil. PLN, respectively. Estimated sales for 2010 stand at c.11 mil. PLN.

The sales drop is attributed to financial distress experienced by the company that is currently in the process of arrangement of its debts within the scope of the polish bankruptcy legislation.

Due to the company’s financial problems the brand was not supported adequately and therefore KOLASTYNA’s sales have seen the aforementioned decreasing trend.

Sarantis Group management’s aim for the first year of operation is to maintain the brand’s current turnover level. However, from the beginning of 2011 onwards Sarantis Group will focus on the repackaging of the products and marketing activities behind the brand’s support with the ultimate target to gradually increase its sales at least to the level of 2007 at around 28 mil. PLN within 2-3 years.

SARANTIS average gross profit margin from KOLASTYNA products is estimated to be at 60%. Moreover, it is worth noting that SARANTIS GROUP will not incur any incremental costs regarding other operating functions as the particular brand, which relates to Sarantis strategic categories of mass market cosmetics and suncare products and is distributed in the SM network, allows for 100% synergies.

Through this deal, Sarantis Group strengthens its product portfolio in Poland and at the same time achieves its strategic goal of further reinforcing its presence in Eastern Europe.