PET Baltija, supported by INVL Baltic Sea Growth Fund, finalizes

PET Baltija, one of the largest recyclers of polyethylene terephthalate (“PET”) in Northern Europe, has completed the acquisition of 100% of the shares of a major Czech fiber producer TESIL Fibres, a spin-off of SILON . This transaction is expected to increase PET Baltija’s annual turnover by more than 50% and ensure the production of higher value-added products by the company.

“This transaction puts PET Baltija on the map as a key international player in the PET recycling sector. Until now, we were the leading player in the region in terms of the production of recycled PET, but our portfolio will now also include the production of a finished product, PET fibre. The growth potential of TESIL Fibers as well as its close-knit and professional team constitute an excellent basis for continuing the development of the company and intelligently exploiting the synergies between the two activities. The vertical integration of PET Baltija and TESIL Fibers and closer cooperation between the two will help us create more value for our employees, customers and partners,” said Salvis Lapiņš, Chairman of the Board of PET Baltija.

TESIL Fibers is the largest PET fiber producer in the Czech Republic with 150 employees and an annual capacity of 33,000 tons, reaching a turnover of 27 million euros last year. Recognized for its high production quality standards, the company acts as a leading supplier of fibers in the European market for the automotive, hygiene, textile and furniture segments.

Deimantė Korsakaitė, Executive Partner of INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board of PET Baltija, said: “PET Baltija has more than doubled its income since our investment. Along with continued organic growth and investments in production expansion that are expected to more than triple existing food grade rPET capacities, PET Baltija is also pursuing a vertical integration path, in line with the overall strategy. Following the acquisition, PET Baltija’s combined revenues are expected to exceed €100 million, which will solidify it as an international player and further strengthen its contribution to sustainable development.

Financing for the transaction, which is one of the largest investments by Latvian companies in the Czech Republic to date, was provided by Luminor Bank, the third largest financial services provider in the Baltic States.

Ilze Zoltnere, Head of Corporate Banking at Luminor in Latvia, added: “Even in this difficult geopolitical environment, Eco Baltia Group companies are able to show steady growth and continue to develop, in particular thanks to thoughtful investments focused on expansion and new markets. We are pleased to support the company’s objectives by financing a significant transaction, which is a strategic step to strengthen the presence in the international market and pursue sustainable growth. »

Legal experts from Sorainen acted as advisors for this transaction. Mantas Petkevičius, Partner at Sorainen, concluded: “We are delighted to see PET Baltija, the Baltic market leader and one of the largest PET recyclers in Northern Europe, grow into a truly vertically integrated international player in the market. We hope that the expansion of regional champions into international markets will become a continuous trend.

PET Baltija
https://www.petbaltija.lv/en/

PET Baltija is one of the largest PET recyclers in Northern Europe and the largest PET recycler in the Baltic region operating in Latvia. It belongs to Eco Baltia, the largest environmental and waste management group in the Baltic countries. Eco Baltia provides full-cycle waste management solutions, from waste collection and sorting to secondary raw material logistics, wholesale and raw material processing. PET Baltija implements the recycling of used polyethylene terephthalate (PET) bottles and is the Baltic-wide industry leader. The recycled product portfolio includes high quality PET flakes and pellets (including food packaging), almost 100% of which is exported.

In 2021, the pro forma turnover of Eco Baltia Group reached c. €150 million, compared to €75 million in 2020, reinforced in part by the acquisition of one of the main Lithuanian waste managers Ecoservice in August 2021. The Group employs more than 2,000 people in Latvia and Lithuania with leading companies in the existing portfolio, including PET Baltija, Eco Baltia Vide, Ecoservice, Latvijas Zalais punkts and Nordic Plast.

The shareholders of Eco Baltia are the private equity fund INVL Baltic Sea Growth Fund (52.81%), the European Bank for Reconstruction and Development (30.51%) and the management of the company (16. 68%).

INVL Baltic Sea Growth Fund
https://bsgf.invl.com/fund-overview/

INVL Baltic Sea Growth Fund, with a total size of €165 million, is the leading private equity fund in the Baltics, with the European Investment Fund (“EIF”) acting as lead investor.

The EIF has committed €30 million with support from the European Fund for Strategic Investments, a key part of the Investment Plan for Europe (or “Junker Plan”), as well as allocation of resources from Baltic Innovation Fund, the “fund of funds” developed in cooperation with the governments of Lithuania, Latvia and Estonia. The aim is to increase capital investment in small and medium-sized enterprises with high growth potential in the Baltic States.

The Fund seeks to build a diversified portfolio of companies, targeting transactions with significant majority or minority shareholdings and writing tickets of €10-30 million, which exhibit high growth potential and the ability to compete on a truly global.

The Fund focuses on the Baltic States and neighboring regions of Poland, Scandinavia and Central Europe in particular. The Fund has so far invested in six companies in healthcare, civil engineering, environmental management (plastic recycling and waste management), veterinary services and the manufacturing of cosmetics and medical products. ‘hygiene.

The fund is managed by INVL, the Baltic region’s leading investment management and life insurance group. Group companies manage pension, UCITS and life insurance commitments as well as individual portfolios, private equity and other alternative investment products. More than 290,000 clients across Lithuania, Latvia and Estonia as well as international investors have entrusted the companies of the Group with the management of more than 1.7 billion euros in assets. The Group has a strong track record in managing private equity assets and building leading players in the Baltics and the Central and Eastern European region for over 30 years.

SILON sro
https://www.silon.eu/

SILON started its activities in the 1950s with the production of polyamide filament yarn and has constantly oriented its business model towards innovation and customers. After extending the product portfolio to technical compounds, reorienting the fiber business towards technical application, and introducing short-spun fiber technology using post-consumer PET flakes as feedstock, the name SILON has always been synonymous with quality, safety and reliability.

SILON sro achieved a total turnover of 150 million euros in 2021 and currently employs more than 400 people in Plana nad Luznici, Czech Republic. Today, SILON designs, produces and sells polyolefin-based performance compounds for applications in the construction, energy, hygiene and automotive sectors, as well as for general industrial applications. .

Person to contact for more information:
Vytautas Plunksnis, Head of Private Equity at INVL Asset Management,
Email: [email protected]