Target Company Overview

FlyCap Mezzanine Fund II is expanding its operations in the Baltic region by making its first investment in the Estonian company Event Center OÜ. Established for over 19 years, Event Center OÜ specializes in the rental of equipment and technology for events of all sizes across Estonia and Finland. Their services range from small corporate gatherings to large-scale international events, including the Tallinn Marathon, Ironman competitions, Day Business conferences, and more. The mezzanine loan provided by the fund will be utilized for the acquisition of new equipment.

Industry Overview in Estonia

The event management and equipment rental industry in Estonia has seen significant challenges due to the global pandemic. Restrictions severely impacted public events, which led to a decline in business activities for companies like Event Center OÜ. Before the pandemic, this sector was flourishing, showcasing the potential for growth once restrictions are lifted. Recent trends, including an increase in announced events and ticket sales, indicate a strong public demand for entertainment, music, and sports events, suggesting that the industry is on the verge of a rebound.

The Estonian event services market is characterized by a diverse range of offerings and a growing segment of international events. Companies in this sector are not only responsible for providing equipment but also for managing complex logistics and ensuring exceptional experiences for attendees. As Estonia continues to enhance its reputation as a destination for events, the demand for professional event services is expected to grow.

Furthermore, as the event management landscape evolves, there is an increasing need for innovative solutions and high-quality equipment to meet the varying needs of clients. This presents an opportunity for Event Center OÜ to capitalize on its longstanding experience and industry knowledge to differentiate itself in a competitive market.

Rationale Behind the Deal

The rationale behind FlyCap's investment in Event Center OÜ lies in the company's proven track record and the experienced management team at the helm. The impact of the pandemic on the events sector posed unique challenges with limited access to traditional financing methods. With commercial banks unwilling to support the company's investment plans, FlyCap's mezzanine funding offers a timely solution that will help Event Center OÜ recover from the operational setbacks caused by the pandemic. The additional equipment will enable the company to enhance its service offerings and secure a stronger position in the Finnish entertainment event market.

About the Investor

FlyCap Mezzanine Fund II is the second fund established by FlyCap, beginning operations on October 1, 2019. To date, the fund has successfully raised investments totaling EUR 21.3 million. Its investors include Altum, NEFCO, INVL, Signet Bank, as well as other private and institutional stakeholders, in addition to contributions from the FlyCap team itself. The fund aims to make approximately 15 investments in companies operating in the Baltic states, with individual investment sizes ranging between EUR 1 to 3 million.

The fund operates by providing mezzanine loans that are typically unsecured and do not require personal guarantees, accompanied by flexible repayment schedules. This approach is designed to support the growth and development of innovative businesses in the region.

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From an expert investment perspective, the investment in Event Center OÜ by FlyCap Mezzanine Fund II represents a potential strong opportunity. The swift rebound of the events sector post-pandemic, paired with the company’s established reputation and management expertise, suggests that Event Center OÜ is well-positioned for recovery and growth. The increasing demand for public events indicates that the market is ripe for proactive players who can deliver enhanced service quality and innovative solutions.

Moreover, the alternative funding approach embraced by FlyCap, which focuses on a company’s potential rather than solely historical financial performance, differentiates it from traditional financing methods. This flexibility may provide Event Center OÜ with the stability it needs to realign its operational strategies effectively, thus facilitating its ambitious growth plans.

Considering these factors, the partnership between FlyCap and Event Center OÜ could emerge as a mutually beneficial arrangement. FlyCap’s support not only provides essential financial resources but also offers strategic insights and connections within the industry, which could further amplify the chances for success in a recovering market. Overall, this deal has the potential to be a strong investment, reinforcing FlyCap's strategy to identify and support companies with promising growth trajectories in the Baltic region.

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