Eco Baltia, the largest environmental and waste management group in the Baltics, backed by INVL Baltic Sea Growth Fund, leading Baltic private equity fund, has completed the acquisition of 100% shares of the street and road maintenance provider SIA Pilsētas Eko Serviss and its related parties (hereinafter – Pekos) through a subsidiary. For the completion of the transaction, permission of the Latvian Competition Council was received in December.
“While economic situation, rise in production costs and energy prices currently cause additional challenges to every company, it is a valuable time for businesses to seek and implement new efficiency solutions, continue development and strengthen the market positions. By expanding our business portfolio and range of services, we are becoming more competitive with a higher future growth potential. Therefore, Pekos is a very valuable and significant addition to the family of our subsidiaries which will strengthen our leading positions in the field of environmental management”, says Jānis Aizbalts, Chairman of the Board at Eco Baltia vide and Head of the Environmental Services at Eco Baltia.
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. The company is one of the leading street and road maintenance service providers in Riga and the Greater Riga region. In 2021, revenue of Pekos group reached €5.7 million. The group employs around 80 employees.
“The year 2022 has made history for the Eco Baltia group with several significant company acquisitions which keep moving us closer to the company’s vision – international leader in the field of environmental management and recycling. During the recent two years, we have grown from a local company to a player in the international market, whose pro-forma turnover in 2022 is expected to reach around 240 million euro. This year, we are planning both integration of Pekos into our environmental management segment, as well as consider options related to new acquisitions and further investments into our current companies to improve their efficiency, production capacities and competitiveness”, stresses Māris Simanovičs, Chairman of the Board at Eco Baltia.
“As shareholders we have set a goal to develop Eco Baltia as a strong regional leader which is characterised by sustainability promoting entrepreneurship and development of circular economy. With this acquisition, the expansion of services in Eco Baltia group’s ever-growing portfolio will help to bring additional value both for customers, employees and investors, and further consolidate the group’s growth potential”, comments Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board at Eco Baltia.
The transaction was conducted by AS Latvijas Zaļais punkts, a subsidiary of Eco Baltia vide. Luminor bank provided financing for the acquisition.
“We are pleased with our successful long-term cooperation and opportunity to support further growth of Eco Baltia. By setting sustainable goals and implementing principles of circular economy, company provides great potential for further development in the field of environmental management and recycling. In terms of turnover Eco Baltia is already the largest industry’s company in the Baltics, providing a full cycle of waste management. We hope that by expanding operations and providing new services, the company will open up for even wider development opportunities”, says Ilze Zoltnere, Head of Corporate Banking at Luminor bank in Latvia.
About Eco Baltia
Eco Baltia 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 2022, the Eco Baltia group pro-forma revenues are expected to reach around €240mn, compared to €150mn in 2021. In September 2022, the group expanded its operations outside of the Baltics, with its PET recycling arm AS PET Baltija, one of the largest PET recyclers in Northern Europe, completing the acquisition of a leading Czech fibre producer TESIL Fibres.
The group companies employ more than 2,200 employees in Latvia, Lithuania, and Czech Republic. Its leading companies are PET Baltija, Eco Baltia vide, Latvijas Zaļais punkts, Nordic Plast, JUMIS, Czech TESIL Fibres and Lithuania-based Ecoservice.
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%).
About INVL Baltic Sea Growth Fund
With a size of EUR165 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’) whilst 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 of companies, targeting majority or significant minority stakes through investments ranging from of EUR 10 million to EUR 30 million. These companies must demonstrate high growth potential and an ability to succeed in conditions of increasing global competition and market volatility.
The fund is focused on the Baltic countries and neighbouring regions including Poland, the Nordics, and Central Europe. The fund has invested in seven companies to date, focusing on sectors including healthcare, medical rehabilitation, 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, life insurance directions, individual portfolios, private equity as well as other alternative investments. More than 300,000 clients in Lithuania, Latvia and Estonia plus international investors have entrusted the group with the management of over EUR 1.75 billion of assets. With a track record spanning 30 years, the group has strong expertise and experience in managing private equity assets and building true market players that are leaders in their respective fields in the Baltic countries and across Central and Eastern Europe.