INVL Baltic Sea Growth Fund’s Eco Baltia to acquire majority stake in Ecoservice

Eco Baltia, the largest environmental and waste management group in the Baltics, backed by private equity fund INVL Baltic Sea Growth Fund and European Bank for the Reconstruction and Development, has agreed a deal to acquire at least an 85% stake in the leading Lithuanian environmental solutions company, Ecoservice.

Acquisition of Ecoservice shares from BaltCap Private Equity Fund II will formally close subject to securing the necessary approvals from the Lithuanian Competition Council.

The Ecoservice Group consists of several companies operating in sectors including household waste management, recycling and construction waste collecting as well as other environmental based services. The company employs in the region of 900 employees in Lithuania and last year had revenues of €35mn.

Maris Simanovičs, Chairman of the Board at Eco Baltia, commented: “This deal strengthens Eco Baltia’s market position as the largest, environmental management group in the Baltics while also entering a new geography in the form of the Lithuanian market. With this acquisition our combined revenues will grow by over 50% to more than €100mn. Combining with Ecoservice will enable us to offer new product lines and services for clients both in Latvia and Lithuania. As the circular economy continues to grow in the Baltics Eco Baltia is well positioned for the next chapter of growth for the Group.”

Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory board at Eco Baltia, commented: “INVL Baltic Sea Growth Fund invested in Eco Baltia in 2020 and we are aiming to significantly grow the company both organically and through acquisitions, focusing on two segments specifically – PET recycling and waste management. This is a significant development for the Company in terms of capability and will be instrumental in achieving these goals.”

Saulius Budrevičius, the CEO and co-owner of Ecoservice commented: “The strategic backing of BaltCap enabled us to expand activities of Ecoservice from 14 to 25 municipalities and almost double the scope of environmental services volume wise. We also grew the family of Ecoservice employees almost 2-fold during last 7 years. We look forward to further expanding the range of our services and contributing to creation of circular economy in Lithuania in partnership with Eco Baltia.”

Šarunas Alekna, Partner at BPEF II says he is content that during BaltCap’s ownership Ecoservice solidified its position as the leading and most modern provider of environmental services in Lithuania: “It has been a privilege to partner with Ecoservice´s management team and contribute to its growth journey. It is important for us that the new owner has a vast experience in the sector -we are excited to witness the further growth of the Company,” Alekna comments.

In 2020, the Eco Baltia Group revenues grew ~6.1% to €75mn. Eco Baltia is offering a full range of waste management services from collection and sorting to logistics, wholesale, and recycling of secondary raw materials. The Group employs around 900 people in Latvia with leading companies in the existing portfolio including PET Baltija, Eco Baltia Vide, Latvijas Zalais punkts and Nordic plast.

Shareholders of Eco Baltia are 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
(https://bsgf.invl.com/fund-overview/)

INVL Baltic Sea Growth Fund with its total size of €165mn is one of the largest private equity funds 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 four companies within the healthcare and civil engineering sectors.

The Fund is managed by one of Lithuania’s leading asset management companies INVL Asset Management, which is part of the Invalda INVL group.

INVL Asset Management
(https://www.invl.com/en/ )

INVL Asset Management 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 240,000 clients in Lithuania and Latvia and international investors at the end of 2020 have entrusted the group with more than €1.2 bn of assets under management. Active since 1991 and with a solid track record, Invalda INVL boasts 30 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.