INVL Baltic Sea Growth Fund (“the Fund”), the largest private equity investment fund for the Baltic region, has signed an agreement in principle to acquire a controlling stake in Eco Baltia, the largest in terms of net sales environment management group (plastic recycling and waste collection) for the geography.
The deal closing is subject to regulatory approval from the Lithuanian Competition Council for merger clearance with the intention to acquire a controlling stake in the Latvian based Eco Baltia.
The European Bank for Reconstruction and Development (“EBRD”) which currently holds 30.51% of shares would remain as the second largest stakeholder in Eco Baltia after the Fund closes the transaction. The Fund and EBRD intend to lead the company on a journey of growth seeking to establish a clear market leader in the Baltics.
Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund, commented: “We have a long-term growth plan to invest significant capital and expertise into Eco Baltia and view the company as sitting favourably at the forefront of a thriving circular economy for the Baltic region. The world we live in has a duty to promote recycling as we seek to achieve a better level of sustainability and greener targets and with its plastic recycling and waste collection divisions, Eco Baltia is therefore a very exciting company to help achieve these goals.”
In 2019, Eco Baltia’s group revenues increased by 9% to €70.62 million, with more than 60% of its revenues coming from recycling sector alone. The group employs more than 800 people and its largest subsidiaries are PET Baltia, Eco Baltia Vide, Nordic Plast and Latvijas Zalais Punkts respectively.
The Fund will make a further announcement in due course to update on progress for this acquisition.
INVL Baltic Sea Growth Fund with its total size of €165mn is the largest private equity fund in the Baltics with the European Investment Fund (EIF) acting as its anchor investor. The EIF has committed €30mn with the support of the European Fund for Strategic Investments, a key element of the Investment Plan for Europe (or the ‘Junker Plan’), as well as allocating resources from the Baltic Innovation Fund, the “fund of funds” initiative developed in cooperation with the governments of Lithuania, Latvia and Estonia. This aims to increase capital investment in high growth potential small and medium-sized enterprises in the Baltic States.
The Fund seeks to assemble a diversified portfolio of companies, targeting majority or significant minority stake deals and writing tickets of €10mn to €30mn, that showcase high growth potential and the ability to compete on a truly global basis. The Fund is focused on the Baltic States and the neighbouring regions of Poland, Scandinavia and Central Europe specifically. The Fund so far has invested in two companies within the healthcare and civil engineering sectors.
The Fund is managed by INVL Asset Management. It is part of the Invalda INVL, one of the leading asset management groups in the Baltic region. The group’s companies manage pension and mutual funds, alternative investments, individual portfolios, private equity assets, and other financial instruments. Over 200,000 clients in Lithuania and Latvia and international investors at the end of 2019 have entrusted the group with more than €1bn of assets under management. Active since 1991 and with a solid track record, Invalda INVL boasts 28 years worth of experience in managing private equity assets in the Baltic countries and CEE landscape while developing companies into best-in-class market leaders.