BaltCap Private Equity Fund II (“BPEF II”), advised by BaltCap, will
control 75 percent of shares of Ecoservice. The remaining 25 percent of
shares will remain with previous owner City Service, AB. The value of
transaction is EUR 14.9 million (100% equity value).
strategy is to invest in attractive, leading companies with growth
potential in the Baltic States. As one of the leaders in the growing
recycling services market, Ecoservice meets these criteria. The company
has an experienced and ambitious management, as well as clear
opportunities for expansion,” said Šarūnas Alekna, BaltCap Investment
The business is seeking to capitalise on the growing
importance of environmental concerns, promoting the uptake of recycling.
Combined with this, Lithuania is lagging behind Western countries on
numerous parameters. Lithuanian waste generation per capita is lower
than the EU average (400 kilograms and 500 kilograms respectively) – a
figure that is expected to grow in tandem with country’s economic
recovery. About 75 percent of waste in Lithuania is currently put into
landfill, many times higher than that seen in countries such as Sweden
and Germany, where the vast majority is recycled or incinerated.
Lithuania aims to reduce the amount of landfilled waste to 35 percent of
total by 2020.
There are more than 100 municipal waste
management companies currently operating in Lithuania, which provides
opportunities for market consolidation in Lithuania and in other Baltic
“Considering the European Union directives and
Lithuania’s strategic plans, amounts of waste dumped in landfills will
have to be decreased drastically. This will require significant
investments in all segments of municipal waste management – from
recycling containers and waste collection systems to sorting and
recycling capacities,” said Š. Alekna.
CEO of City Service Jonas
Janukėnas added: “To adhere to unbundling requirements, we have sold a
controlling stake in Ecoservice to BaltCap’s BPEF II. I’m certain that
BaltCap’s experience in managing Baltic mid-sized companies will be
instrumental in successfully developing Ecoservice’s waste management
business across the region going forward.”
City Service, UAB, is
obliged to sell Ecoservice due to regulatory requirements to unbundle
businesses. City Service is to withdraw from business of collecting,
transporting and processing of secondary raw materials and municipal
waste by 1st June, 2014. City Service took the opportunity to maintain a
part of company’s shareholding without any exclusive acquisition or
corporate governance rights.
The investment in Ecoservice is the
first from BPEF II, which was launched last year and reached a first
close on €51m earlier this year. The fund will pursue a similar strategy
to its predecessor fund, aiming to acquire controlling stakes in
leading Baltic growth businesses with the ability to scale across the
region and wider Europe.
together with subsidiaries, is engaged in collection, transportation and
processing of secondary raw materials and household waste. The company
has been actively expanding throughout regions of Lithuania since 2007.
Consolidated revenues of the group amounted to EUR 16 million.
Established in 1995, the company has been operating this business for over ten years. The company employs about 260 people.
is the leading independent private equity firm focusing on small and
midmarket buyout and expansion capital investments in the Baltic States.
BaltCap has strong presence in all three Baltic countries with local
offices and experienced team of 16 professionals.
BaltCap has been managing several private equity and venture capital
funds with total capital of over EUR 240 million and has made more than
BaltCap is a member of European Private Equity
& Venture Capital Association (www.evca.eu), Estonian Private Equity
and Venture Capital Association (www.estvca.ee), Latvian Venture
Capital Asso-ciation (www.lvca.lv ) and Lithuanian Venture Capital
Association. BaltCap is a signatory of the United Nations Principles for
Responsible Investment (UNPRI) since 2008.
BaltCap investment director
Tel.: +370 686 89242