INVL Baltic Sea Growth Fund-backed PET Baltija completes the acquisition of a leading Czech fibre producer

Vilnius, LITHUANIA


PET Baltija, one of the largest PolyEthylene Terephthalate (“PET”) recyclers in Northern Europe, has completed the acquisition of 100% of shares of a leading Czech fibre producer TESIL Fibres, a spin-off of SILON. This transaction is set 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. Up to this point, we were the region's leading player in terms of recycled PET production but now our portfolio will also include the production of a finished product – PET fibre. The growth potential of TESIL Fibres as well as its close-knit and professional team serve as an excellent foundation to further the development of the company and make smart use of the synergies between the two businesses. The vertical integration of PET Baltija and TESIL Fibres and a closer cooperation between the two will help us to create more value for our employees, customers and partners,” said Salvis Lapiņš, Chairman of the Board at PET Baltija.

TESIL Fibres is the Czech Republic’s largest producer of PET fibre with 150 employees and an annual capacity of 33 000 tonnes, reaching revenues of €27 million last year. Known for its high production quality standards, the company acts as a primary fibre supplier in the European market for the automotive, hygiene, textile and furniture segments.

Deimantė Korsakaitė, Executive Partner at INVL Baltic Sea Growth Fund and Chairman of the Supervisory Board at PET Baltija, commented: “PET Baltija has more than doubled its revenues since our investment. In parallel to further organic growth and investments in production expansion set to more than triple the existing food-grade rPET capacities, PET Baltija is also pursuing a path of vertical integration, in line with the overall strategy. Following the acquisition, the combined revenues of PET Baltija are set to exceed €100 million, solidifying it as an international player and further strengthening its contribution towards sustainable development.”

The financing for the transaction, which marks one of the largest investments made by Latvian companies in the Czech Republic to date, was granted by Luminor Bank, the third largest provider of financial services 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, including through well-considered investments focused on expansion and new markets. We are pleased to support the company's objectives by financing a transaction of a significant scale, which is a strategic step to strengthen the presence in the international market and continue 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, expanding and becoming a truly international vertically integrated market player. We hope that the expansion of the region's 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 Baltics. 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 polyethene terephthalate (PET) bottles and is the industry leader on the Baltic scale. The recycled product portfolio includes high-quality PET flakes and granules (including food packaging), of which nearly 100% are exported.

In 2021, the Eco Baltia group pro-forma revenues reached c. €150mn, doubling from €75mn in 2020, bolstered in part by an acquisition of a leading Lithuanian waste manager Ecoservice in August 2021. The Group employs over 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.

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%).

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

INVL Baltic Sea Growth Fund with its total size of €165mn is the leading private equity fund 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 neighboring regions of Poland, Scandinavia and Central Europe specifically. The Fund so far has invested in six companies within the healthcare, civil engineering, environmental management (plastic recycling and waste management), veterinary services and cosmetics and hygiene products manufacturing sectors.

The Fund is managed by the leading in the Baltic region investment management and life insurance group INVL. The Group’s companies manage pension, mutual funds 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 plus international investors have entrusted the Group’s companies with the management of over EUR 1.7 billion in assets. The Group has a strong track record managing private equity assets and building leading market players in the Baltic countries and the Central and Eastern European region for over 30 years.

SILON s.r.o.
https://www.silon.eu/

SILON started its activities in the 1950s with the production of polyamide filament yarn and has constantly geared its business model towards innovation and clients. After the extension of the product portfolio to Technical Compounds, the re-orientation of the fibre business to technical application and the introduction of short-spinning fibre technology using postconsumer PET – flakes as raw material, the name SILON always stood for quality, safety and reliability.

SILON s.r.o. achieved in 2021 total revenues of 150 mio EUR and employees currently more than 400 people in Plana nad Luznici, Czech Republic. Today, SILON designs, produces and sells polyolefin-based performance compounds for applications in construction, energy, hygienic and automotive industries, as well as for general industrial applications.

Contact person for further information:
Vytautas Plunksnis, Head of Private Equity at INVL Asset Management,
E-mail: vytautas.plunksnis@invl.com