Month: November 2023

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INVL Baltic Sea Growth Fund, the leading private equity fund in the Baltic States, together with its portfolio company Eco Baltia, the largest environmental resource management and recycling group in the Baltics, has closed an agreement for the acquisition of 70% of the shares in Metal-Plast. Metal-Plast is the largest recycler of PVC window and door profiles in Poland. 

As a result of the transaction, Eco Baltia and INVL Baltic Sea Growth Fund now own 70% of Metal-Plast, with 38.5% and 31.5% respectively. Family Foundation SIDN retains a 30% stake in the company. INVL Baltic Sea Growth Fund owns a 52.81% stake in Eco Baltia, while 30.51% is owned by the European Bank for Reconstruction and Development. The remaining shares are owned by Māris Simanovičs.  

Sebastian Fedorowicz, founder of Metal-Plast, commented:

“This year marks the third decade of Metal-Plast, which is a significant period in the company’s development. During these years, we have strengthened our position as the largest recycler of PVC window and door profiles in Poland. Our products and services cover the Czech Republic, Germany, Hungary, Slovakia, Austria as well as other countries. We are now ready to take the next steps in our international development, where we will continue to work in close partnership with Eco Baltia and INVL Baltic Sea Growth Fund”. 

Jānis Aizbalts, Head of Environmental Services at Eco Baltia, commented:  

“In recent years, we have witnessed the rapid development of the Eco Baltia Group. We have expanded our activities in our home market, in Lithuania, in Czech Republic and now also in Poland. The group’s business portfolio thus far includes environmental management services and plastic packaging recycling, and since 2022 PET fiber production in addition. We are pleased to now have the opportunity to further contribute to the PVC recycling sector together with Metal-Plast”. 

Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund and Chairman of the Eco Baltia Supervisory Board, added:  

“Metal-Plast is a welcome addition to our portfolio as the 8th investment, as circular economy remains to be one of our key strategic verticals. Exciting growth journey awaits ahead in partnership with one of the most successful portfolio companies to date Eco Baltia and founder Mr. Fedorowicz as Metal-Plast turns a new page in its development.”  

Metal-Plast has an annual turnover of ~€34 million and employs ~200 people. The company is based in Świebodzice, in the Polish province of Lower Silesia. Metal-Plast’s current recycling capacity is ~29,000 tonnes per year. There are plans to increase this by a factor of 1.5 to ~45,000 tonnes per year, thereby further increasing its contribution to the circular economy. To contextualise, one tonne of recycled PVC saves two tonnes of CO2 emissions, which has a significant and positive impact towards the European Union’s climate neutrality targets. 

The company will continue to be led by Chief Executive Officer Mr. Grzegorz Jasinski. Jasinski concluded:  
“One of Metal-Plast’s core values is for continuous development, where we are now entering a new and exciting phase for. We are delighted to have such influential market players with their extensive experience in international waste management operations and recycling, join our shareholder base. In close cooperation with Eco Baltia and INVL Baltic Sea Growth Fund, we will now be able to achieve even higher recycling targets for PVC window and door frames. This direction of travel will be particularly important in the coming years, when a wave of window replacement is expected in a number of European Union countries.” 

The acquisition of Metal Plast was financed by mBank, the Polish bank of the Commerzbank Group. 
Tomasz Niewola, Head of Investment Banking at Polish bank mBank: 

“From both a banking and advisory perspective, we are seeing an increased inflow of regional capital – including from the Baltic States – into Poland as the largest CEE economy. The recycling / circular economy segment is one of the most interesting at the moment, both in terms of ESG impact and business attractiveness”. 

The owner of Metal-Plast was advised by M&A advisor mInvestment Banking S.A. (part of mBank Group) and law firm Ożóg Tomczykowski. Eco Baltia and INVL Baltic Sea Growth Fund were advised by Wolf Theiss, Sorainen and Deloitte. 

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The largest environmental resource management group in the Baltic States, Eco Baltia AS, has successfully completed its second three-year EUR 10 million bond issue. The issue, which was conducted as a private placement, once again attracted strong investor interest, with total demand exceeding the issue size by amounting to 1.7 times. Orders were received from more than 100 institutional and retail investors in Latvia, Estonia and Lithuania.

“After the second Eco Baltia bond issue, we also see that investor activity is high. This confirms the investors’ long-term vision for the development of the company and the entire environmental resource management segment, in which we are expanding our international presence. The investments made will help us to take the next steps in the further growth of the group and contribute to the promotion of the circular economy, which is becoming increasingly important worldwide, in line with the European Union environmental policy cornerstones,”says Māris Simanovičs, Chairman of the Board of Eco Baltia.

The proceeds of the issue will be used to further the company’s development strategies through the acquisition of new companies. The acquisition of Metal-Plast, Poland’s largest PVC window recycler, is currently under consideration and will further expand Eco Baltia’s presence on the international market.

“Our goal is to rapidly accelerate Eco Baltia’s growth and further strengthen its position in the international market.  Experience in the capital market has shown us that attracting investment is one of the tools to achieve this. And this second bond issue shows us that we are on the right track in Eco Baltia’s development,”  says Santa Spūle, Eco Baltia Board Member and CFO.

The minimum subscription amount per investor was EUR 100 thousand. The total demand for bonds at the end of the placement period was almost EUR 17 million, 1.7 times the maximum planned issue size. Investors subscribing to the minimum investment amount of EUR 100,000  received full allocation, while the larger orders were partially satisfied given the high level of investor interest.

The highest interest in Eco Baltia’s bond issue came from retail investors, who were allocated 90% of the issued  bonds, while institutional investors received 10% allocation.

The coupon rate of Eco Baltia’s second bond issue was set at 9% per annum. The bonds have a maturity of three years (2 November 2026), but the issuer has the right to redeem the bonds prematurely after two years.

“Eco Baltia’s strategic development, financial performance and business model are in line with capital market guidelines, as demonstrated by yet another successful bond issue. As a long-standing client, Eco Baltia has proven to be a stable and growth-oriented company. This has also been recognised by investors. We are grateful to have been involved in this transaction for the second time and to have contributed to the development of Latvia’s leading environmental resource management company,” said Gints Belēvičs, Head of Markets in Luminor Bank.

The bonds are expected to be listed on Nasdaq Riga’s First North alternative market within six months of the issuance. The arranger of Eco Baltia bond issue is Luminor Bank, one of the leading financial service providers in the Baltic States, and the distributor is Šiaulių bankas. COBALT is the certified advisor, while Eversheds Sutherland Bitāns is the bondholders’ trustee.