Case Study: Vilniaus Baldai


Main Facts


Industry Manufacturing
Company Description Leading furniture manufacturer in Lithuania using modern honeycomb technologies
Region Baltics
Investment Date 1992
Amount Invested EUR 5.4 million
Status Exited
Realised Value EUR 60.4 million
Cash multiple 11.2x
IRR 27.8%

Key numbers


  • 5.4(1992)

  • 48.1(2014)


  • 0.11(1992)

  • 4.54(2014)


  • 495(1992)

  • 940(2014)



The history of the company goes back to 1883, when it started as a small workshop. Prior to its privatisation by Invalda, Vilnius Baldai was a furniture manufacturing company owned and managed by the state, fully vertically integrated and with high production capacity.

  • First Invalda investment made in 1992 during the privatisation process.
  • One of the first investments of Invalda.
  • Controlling stake in Vilniaus Baldai acquired in 1995.
  • In 2013 a tender offer was launched and investment was further increased.
  • The total investment amount throughout the holding period amounted to EUR 5.4 million.

Investment Rationale

  • Existing vertically integrated business dating back to 1883.
  • Low entry value.
  • Unutilized growth potential. Opportunity to increase efficiency, profitability and value.
  • Inefficient and undermanaged company, offering sizeable value creation potential through management improvements.
  • Export potential.

Value Creation during Invalda ownership

HR and Talent management

Change of management. After heavy investment period, in 2006 new CEO was hired. Within 3 years sales increased by 35%, while the number of employees decreased by 54%, which led to the highest net margin in its history in 2010, when Vilniaus Baldai achieved sales of EUR 57.1 million with net profit EUR 8.1 million (14% margin).

Alignment of interests. Introduced blue collar employee remuneration scheme.


Operational Excellence

Manufacturing process optimisation. Implementation of lean processes in manufacturing.

Efficiency. IKEA (strategic customer of Vilniaus Baldai) is known for its attention to cost control, operational details, and continuous product development. We focused management on IKEA requirements and were able to increase sales by 35%, while number of employees decreased by 54% within 3 years.

Cost efficiency and working capital management. Cooperation with IKEA requires constant price improvements. To improve profitability and efficiency we focused management on continuous cost efficiency management, pricing and inventory optimisation.

Supply chain trough procurement optimisation.

Best in class. The outcome of these changes and the investments made turned the company into a world class example of efficiency. It was used as a case study by IKEA for training of its other suppliers around the world.


Strategic Growth

Contract manufacturing for strategic client. The business model was shifted from diversified client portfolio to contract manufacturing for a strategic client – IKEA.

Significant investments. Invested c. EUR 30 million into new equipment for further manufacturing process improvements, which consolidated the profit margins with further growth.

Value creating add-on acquisitions:

  • in 2004, new manufacturing facilities were bought from a small Lithuanian furniture company and equipment from manufacturer in the UK, which allowed to increase manufacturing capacity by 40%.
  • to secure supplies of the main production material, in 2005 Vilniaus Baldai acquired 25% in a chipboard supplier Giriu Bizonas, financing construction of new HDF plant. The stake in this company was eventually sold to IKEA in 2008.


Positioned for exit
  • Well managed, cash generating company.
  • Very high level of efficiency across the organisation – case study for IKEA.
  • Long-term, strategic relationship with IKEA.
  • Highly optimised working capital.
  • Owners, management and employees’ interests aligned.



Total realized value – EUR 60.4 million, out of which EUR 22.9 million were dividends received within the investment period.

The investment generated 11.2x cash on cash multiple and IRR of 27.8%. At the time of exit Vilniaus Baldai were valued at P/E ratio of 10 and EV/EBITDA of 6.9.