Eco Baltia, the largest environmental and waste management group in the Baltics, backed by INVL Baltic Sea Growth Fund, leading Baltic private equity fund, is set to expand its Latvian activities in road and street maintenance with an agreement reached to acquire 100% shares of SIA Pilsētas Eko Serviss (hereinafter – Pekos) and its related companies. The transaction, which is being carried out by Eco Baltia’s environmental services arm Eco Baltia vide, is expected to be closed later this year, subject to merger approval from the Latvian competition council.
Founded in 2003, Pekos group offers such services as street and road maintenance, water drainage system maintenance and repair works, as well as equipment rental. In 2021, revenue of Pekos group amounted to €5.7mn while. The group employs around 80 people.
Jānis Aizbalts, Chairman of the Board of Eco Baltia vide and Head of the Environmental Services at Eco Baltia, commented: ”The last two years of Eco Baltia’s environmental services segment’s activities should be characterised by dynamic growth. During this period, we have not only implemented internal consolidation, but also acquired several companies within the framework of the segment to increase our competitiveness, find new opportunities and become a leader in the Baltics. While our subsidiary Ecoservice is one of the market leaders in road and street maintenance in Lithuania, in Latvia we are planning to develop this service more rapidly with the acquisition of Pekos, promoting synergies also with our Lithuanian subsidiary. Pekos has a very extensive and successful experience in the sector, the necessary technical equipment and a professional team of employees, which creates a very good platform for further growth already as being a part of the environmental management segment of Eco Baltia.”
Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board of Eco Baltia, said: ”Our strategic objective to develop Eco Baltia as a strong regional leader focusing on sustainable environmental services and recycling is already delivering results – competitiveness and efficiency of our companies are growing, as are consolidated revenue. By expanding our offer in the environmental management segment, we create new value both for customers, employees and investors.”
Alvis Krauklis, Member of the Board and co-owner of Pilsētas Eko Serviss, commented: ”Pilsētas Eko Serviss has been on the market for almost 20 years, and we are pleased to call ourselves one of the leading providers of street and road maintenance services in the Riga and the Greater Riga region. We are happy that the company will be able to continue its development and make new investments in the future, but already as a subsidiary of Eco Baltia vide. For our existing clients and employees, these changes will also be beneficial, because being part of a larger group will allow us to plan our investments in future development on a broader scale and with the involvement of the expertise of the entire Eco Baltia.”
Eco Baltia group is the largest environmental and waste management group in the Baltics, providing the full-cycle waste management solutions from waste collection and sorting to secondary raw material logistics, wholesale and raw material processing as well as PET and PE/PP plastics recycling.
In 2021, the Eco Baltia group pro-forma revenues reached €150mn, doubling from €75mn in 2020, bolstered in part by an acquisition of a leading Lithuanian waste manager Ecoservice in August 2021. The Group employs over 2,200 people in Latvia and Lithuania with leading companies in the existing portfolio including PET Baltija, TESIL Fibres, Eco Baltia vide, Ecoservice, Latvijas Zaļais punkts and Nordic Plast.
Shareholders of Eco Baltia are private equity fund INVL Baltic Sea Growth Fund (52.81%), the European Bank for the Reconstruction and Development (30.51%) and management of the company (16.68%).
INVL Baltic Sea Growth Fund
With a size of EUR 165 million, the INVL Baltic Sea Growth Fund is one of the largest private equity funds in the Baltics. The European Investment Fund (EIF) is its anchor investor.
The EIF, which is a part of the European Investment Bank, has committed EUR 30 million with the support of the European Fund for Strategic Investments (a key element of the Investment Plan for Europe, or ‘Junker Plan’) while also allocating resources from the Baltic Innovation Fund, a “fund of funds” initiative developed in cooperation with the governments of Lithuania, Latvia and Estonia. The initiative aims to increase capital investment in high-growth-potential small and medium-sized enterprises in the Baltics.
The fund seeks to assemble a diversified portfolio, targeting majority or significant minority stakes through investments of EUR 10 million to EUR 30 million in companies that demonstrate high growth potential and an ability to succeed in conditions of increasing global competition.
The fund is focused on the Baltic countries and neighbouring regions including Poland, the Nordics and Central Europe. The fund so far has invested in six companies in sectors including healthcare, civil engineering, environmental management (plastic recycling and waste management), veterinary services, and the manufacturing of cosmetics and hygiene products.
The fund is managed by INVL, the leading Baltic investment management and life insurance group. The group’s companies manage pension and mutual funds and life insurance directions, individual portfolios and private equity and other alternative investments. More than 290,000 clients in Lithuania and Latvia plus international investors have entrusted the group with the management of over EUR 1.7 billion of assets. In the business for 30 years now, the group has solid experience in managing private equity assets and building market players that are leaders in their respective fields in the Baltic countries and Central and Eastern Europe.