|Company Description||Roads and bridge construction company|
|Region||Lithuania – Poland|
|Amount Invested||EUR 7.2 million|
|Realised Value||EUR 30.4 million|
Kauno Tiltai was established in 1949 with the purpose of rebuilding roads after the World War II. The company has constructed and reconstructed a large number of roads in Lithuania and built over 100 bridges. The company was transformed during Invalda’s period of ownership from being a local Lithuanian road construction company at the time of entry, to becoming a regional infrastructure construction group operating in Lithuania and across Poland at the time of exit.
Change of management. Newly appointed management drove a number of operational improvements, resulting in optimized working capital, increased efficiency and solid growth.
Efficiency. Focusing management on the necessity to substantially increase efficiency across the company’s processes.
Procurement. Efficient procurement introduced.
Focused management on increasing the participation in cross-border tenders.
Via organic growth and acquisitions introduced new business lines: (i) in 2007 the first projects were implemented in railway construction, tunnels construction and reconstruction, street lightning installation; (ii) in 2010 the company started its first projects in construction of sea ports and their infrastructure.
Accelerated growth through value–enhancing acquisitions:
Optimising leverage for growth. Invalda implemented a policy of using leverage more optimally to finance growth of the business. Invalda team led all the negotiations with the banks to achieve this.
Reporting and budgeting. Financial planning, budgeting, reporting and analysis systems were introduced to accelerate growth of the company and ensure efficient management.
In 2011 Trakcja Polska SA (Trakcja) acquired Invalda’s stakes in Kauno Tiltai (43.36%) and Tiltra Group (44.8%) for EUR 79.5 million in the form of:
Taking into account the selling price of the acquired financial instruments, currency exchange rate and expenses related to the transaction, the final amount received for the deal was EUR 30.4 million. In spite of a decline in the share price before Invalda could realise its full proceeds, Kauno Tiltai/Tiltra transaction remains one of the most profitable and successful deals of Invalda, generating 4.2x cash on cash multiple and IRR of 34.1%.
Exit EV/EBITDA multiple was 8.86x.