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Livonia Partners, a pan-Baltic private equity firm, together with LHV Pension Funds and Ambient Sound Investments, agreed to invest in Cgates, a leading Lithuanian provider of cable television and internet services.
The investor consortium led by Livonia Partners will invest into a significant minority stake in Cgates to support growth of the company and further network and technology upgrades. The transaction is pending regulatory approval.
“In the growing Lithuanian market, Cgates as a leading player has proven its ability to grow organically and through acquisitions,” says Mindaugas Utkevičius, a founding partner at Livonia.
With nearly 300 employees and consolidated sales of €19.5 million in 2016, Cgates is Lithuania’s second-largest cable network operator. It provides cable and digital television, fixed telephony and fibre-optic broadband internet to more than 270,000 subscribers in 18 cities. The Vilnius-based company is currently owned by the founders of former Cgates’s parent Starman, which was bought out by Elisa Corporation of Finland earlier this year.
“The new investors support our strategy of becoming the product leader, strengthening our brand and the organisation, and seeking further consolidation opportunities. We aim to become the best in class platform to a wider audience and look forward to partnering with Livonia for their expertise in this sector,” says Cgates CEO Petras Kirdeika.
“This transaction successfully completes the series of steps we have taken over the course of the past two years to restructure our telecom operations in the Baltics,” says Indek Kuivallik, the Chairman of Polaris Invest. “Lithuanian market has vast potential and we are now uniquely positioned to make the most of it.”
The investment is the fourth for Livonia Partners Fund I, whose strategy is to invest in medium-sized companies in the Baltics that are well-managed and growing. Last year the fund acquired Ha Serv, an Estonia-based sauna manufacturer, and Hortes, Estonia’s leading home and gardening retail brand, and earlier this year Livonia invested in IT network and security firm Santa Monica Networks in Latvia and Lithuania.
“This is the fund’s second investment in telecoms and technology, an attractive sector for investments,” Utkevičius notes. His partners Rain Lõhmus and Kristīne Bērziņa formerly held roles with Starman and Lattelecom, respectively. Utkevičius also welcomed the participation of Ambient Sound Investments, the investment firm originated by the founders of Skype.
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Livonia Partners is a private equity investment firm based in the Baltics, currently managing €83 million as part of the Livonia Partners Fund I and the Livonia Partners EIF Co-Investment Fund. Run by founders Kaido Veske, Kristīne Bērziņa, Rain Lõhmus, and Mindaugas Utkevičius, its investors are domestic and international financial institutions. Livonia was partly originated through the Baltic Innovation Fund (BIF), a common initiative of the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and the European Investment Fund.
LHV Pension Funds Estonia are one of the largest Baltic pension fund managers with more than 170,000 clients and €1 billion assets under management. It is part of Estonia’s financial group LHV, whose shares trade on the Nasdaq Baltic market.
Ambient Sound Investments is an independent investment vehicle established in 2003 by the four founding engineers of Skype Technologies. The company now managers €100 million of its partners’ assets with a focus on technology-related firms.
Cgates is one of Lithuania’s largest cable entertainment and communication companies. Established in 1991, it now provides cable and digital television, fixed telephony and broadband internet to more than 270,000 customers in 18 cities.