INVL Baltic Sea Growth Fund signs agreement to acquire the Pehart Group in Romania
INVL Baltic Sea Growth Fund, the leading private equity fund in the Baltics, has signed an agreement to acquire shares in Pehart Group, a leading producer of household and industrial paper products in Romania and owner of the oldest paper factory in Romania with a 187-year tradition.
The transaction with Abris Capital Partners is expected to be completed in the first quarter of 2025, subject to obtaining the necessary regulatory approvals and fulfilling other conditions stipulated in the agreement.
The Pehart Group produces toilet paper, paper towels, napkins, and other hygiene paper products, as well as jumbo rolls, used in the converting process into paper products for household and industrial use. Pufina, one of the most popular tissue paper brands in Romania, Alint, Altessa and SOVIO, the Away-from-Home products division, are part of the Pehart Group portfolio. In 2023, the Pehart Group generated revenues of EUR 168 million and employed nearly 550 people across its companies.
Today, Pehart Group is one of the largest tissue paper producers in South-East Europe, present with its household and industrial products in 19 countries. With significant investments in recent years targeting high-performance production technologies, energy efficiency, portfolio diversification and consolidation on the regional market, the company is constantly striving for a lower carbon footprint and sustainable development.
”In continuing the development strategy of our company, we are looking forward to this new partnership with INVL Baltic Sea Growth Fund. Pehart Group, a Romanian brand with a lasting tradition and a history strongly linked to the beginning of consumer paper processing in Romania, had a remarkable evolution in the past years alongside a valued partner on this journey, and for that we thank Abris Capital Partners. We are ready to leverage the growth opportunities and enhance our market position together with our new partner. We will continue to focus on operational excellence, creating value for consumers and extending our position in the region. The confidence that INVL Baltic Sea Growth Fund has shown in our vision and potential is a testament to the value and performance of our team”, said Gabriel Stanciu, CEO Pehart Group.
"Partnership has always been central to our philosophy, and we’re thrilled at the prospect of collaborating with the Pehart Group’s management team. Upon successful completion of the transaction, Pehart Group will become the tenth portfolio investment of the INVL Baltic Sea Growth Fund, marking a significant milestone in completing the fund’s portfolio. The fund is committed to implementing strategies that drive operational excellence, create long-term value for all stakeholders and build industry leaders in the region. We are excited to support the management team in strengthening Pehart Group’s market leadership and driving its next phase of growth”, – said Vytautas Plunksnis, Partner at INVL Baltic Sea Growth Fund.
”We are most proud of the management team at Pehart and grateful for their relentless dedication in steering the company through both challenging times and market opportunities. We are confident in their ability to continue Pehart’s positive evolution and consolidate its position as a top player on the regional market. This milestone marks the end of an excellent partnership and confirms the success of our strategy to support high-potential companies in achieving their growth objectives”, said Adrian Stanculescu, Partner and Head of Romania at Abris Capital Partners.
Equity for the deal will be provided by the INVL Baltic Sea Growth Fund and some of its investors co-investing via INVL BSGF Co-Invest Fund II.
The INVL Baltic Sea Growth Fund, with a size of EUR 165 million, is a closed-end private equity fund for professional investors. To date the fund has invested in and developed industry leaders such as Eco Baltia, InMedica, Eglės Sanatorija and Galinta. As of the end of 2023, transactions completed by the INVL Baltic Sea Growth Fund had a net internal rate of return of 26% and a cash-on-cash multiple of 1.9 times.
INVL Asset Management is now fundraising for INVL Baltic Sea Growth Fund’s successor fund INVL Private Equity Fund II targeting the size of EUR 250 million.
About the INVL Baltic Sea Growth Fund
With a size of EUR 165 million, the INVL Baltic Sea Growth Fund is the leading private equity fund in the Baltics. Its anchor investor is the European Investment Fund (EIF).
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 the Junker Plan) while 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 focused on investments in the Baltic countries and neighbouring regions such as Poland, the Nordics, and Central Europe. The INVL Baltic Sea Growth Fund has already invested in a diversified portfolio of nine companies. That includes companies operating in the food processing, healthcare, medical rehabilitation, civil engineering, plastic recycling, environmental management, and veterinary services sectors, as well as in the manufacturing of cosmetics and hygiene products.
The fund is managed by INVL Asset Management, the leading alternative asset manager in the Baltics and part of the Invalda INVL group, which has been in the investment management business for more than 30 years. The group’s companies manage or have under supervision more than EUR 1.6 billion of assets under management across multiple asset classes including private equity, forests and agricultural land, renewable energy, real estate, and private debt. The group’s activities also include family office services in Lithuania, Latvia, and Estonia, management of pension funds in Latvia, and investments in global third-party funds.
About Pehart Group
With a 187-year tradition, the Pehart Group is one of the largest paper manufacturers in Southeast Europe. The company is present with its household and industrial products in 19 countries in Central, Eastern and Southern Europe (Poland, Czech Republic, Slovakia, Hungary, Croatia, Slovenia, Serbia, Bosnia, Herzegovina, Montenegro, Bulgaria, Macedonia, Ukraine, Greece, Cyprus, Israel, Rep. Moldova, Germany, Albania).
Pufina, one of the most popular tissue paper brands, Alint, Altessa and SOVIO, the AfH products division, are part of the Pehart Group portfolio. The company also produces jumbo rolls, giant rolls of paper used in the converting process into paper products for household and industrial use.
Pehart Grup is defined by continuous evolution, efficiency, respect for the planet 's resources and for the people who build its story every day. It continuously optimizes its products and services by creating a sustainable and equitable environment for a renewable future. Respect for the latest environmental regulations through the traceability of resources, efficient production and use of materials, and a safe, pleasant working environment for the team and partners are Pehart Group values, as is the encouragement of initiative and entrepreneurship within the company.
About Abris Capital Partners
Abris Capital Partners is a leading independent private equity fund focusing on mid-market opportunities in Central European countries. Founded in 2007, Abris ' strategy is to partner with the most dynamic and successful companies in Central Europe that can benefit from an inflow of capital and/or management expertise at both strategic and operational levels. With an investment capital of approximately €1.3 billion, Abris has raised financial backing from many of the world 's leading global investment institutions, including public and corporate pension funds, financial institutions, insurance companies and endowment funds from US universities. Abris has a long-term investment horizon and operates regional teams in Warsaw and Bucharest.
Contact person for further information:
Vytautas Plunksnis, Head of Private Equity at INVL Asset Management,
vytautas.plunksnis@invl.com
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