INVL Baltic Sea Growth Fund portfolio company Eco Baltia, the largest environmental and waste management group in the Baltics, with backing from the European Bank for the Reconstruction and Development (EBRD), has completed a deal to acquire an 85 per cent stake in the leading Lithuanian environmental solutions company, Ecoservice.
The 85 per cent stake was acquired from BaltCap Private Equity Fund II (BPEF II). Financing for the transaction on the amount above EUR20 million was provided by Luminor, the third-largest provider of financial services in the Baltics. Shareholders of Eco Baltia are INVL Baltic Sea Growth Fund (52.81 per cent), the European Bank for the Reconstruction and Development (30.51 per cent) and management of the company (16.68 per cent).
This deal further strengthens Eco Baltia’s market-leading position in the region more broadly with combined annual revenues of Eco Baltia and Ecoservice anticipated to reach EUR124 million with an EBITDA of EUR24 million for 2021.
The Ecoservice group consists of several companies operating in sectors including household waste management, recycling and construction waste collection as well as other environmental services. The company employs around 900 employees in Lithuania and last year had revenues of EUR35 million.
In 2020, Eco Baltia‘s revenues grew by 6 per cent to EUR75 million. The group offers a full range of waste management services from collection and sorting to logistics, wholesale, and recycling of secondary raw materials, employing around 900 people in Latvia. Eco Baltia‘s leading companies in the existing portfolio include PET Baltija (the largest PET bottles recycler in the Baltics), Eco Baltia vide (waste manager), Latvijas Zalais punkts (producers‘ responsibility organization – Green Dot) and Nordic Plast (PE/PP recycler).
Following the purchase of Ecoservice, Eco Baltia intends to increase the volume of recyclable materials it manages, and to expand the processing of construction waste, which is already being actioned by Ecoservice in Lithuania. As it develops this offering into Latvia, Eco Baltia will be able to provide a full range of these services, from collecting and transporting construction waste to processing it. There are also plans to expand portable toilet rental operations in Latvia and the waste collection services associated.
Māris Simanovičs, Board Chairman of Eco Baltia, says: “This deal represents one of the most significant achievements in the history of Eco Baltia. Having partnered with such a major player in the market like Ecoservice, we can now plan for an even more rapid growth trajectory for our business as we aim to deliver the best quality services possible for our clients in Latvia and Lithuania respectively. Working with Ecoservice will also significantly enhance our waste collection and sorting capabilities, ultimately resulting in more recyclable raw materials being sent for processing. This deal is therefore an important step not only for us, but also for our circular economy and industry on a truly national level.”
Vytautas Plunksnis, INVL Baltic Sea Growth Fund Partner and Eco Baltia Supervisory Board Chairman, says: “The merger of these companies creates real momentum in the development of the environmental management and recycling sector for the Baltic region. It will facilitate the creation of powerful regional champions that are attractive to both strategic partners and financial investors. The long-term goal of Eco Baltia is to expand its recycling capacity, and this deal is a way of achieving this aim in a shorter timeframe. We look forward to updating the market with new developments and deal flow in the environmental management and recycling spaces in due course.”
Andrius Načajus, Head of Corporate Banking at Luminor, says: “Luminor has worked with Eco Baltia for the past 10 years and we are extremely proud to have provided the financing facility for this transaction. Eco Baltia is a forward-thinking company backed by strong and professional shareholders which aligns with our own ESG principles. This deal allows Eco Baltia to maximise its positive impact on the environment through development of a circular economy. We look forward to building on our already strong relationship and supporting further growth of the company for many years to come.”
Saulius Budrevičius, Executive Director and Co-Owner of Ecoservice, says: “This is an important moment for us as a company and the long-term development of our industry as a whole. Working towards a circular economy is one of the key objectives of the EU Green Deal and having joined forces with a very experienced environmental service provider in a neighbouring country, we will now be able to achieve more progress towards these major goals including expanding waste management and recycling even further. In partnership with Eco Baltia, we will continue broadening our range of services offered, and with the shared operational expertise of both companies, we will now be able to offer a more comprehensive range of services to our Lithuanian clients.”
