Information on the Target

INVL Baltic Sea Growth Fund, the premier private equity fund in the Baltic States, alongside its portfolio company Eco Baltia, the largest environmental resource management and recycling group in the region, has successfully acquired a 70% stake in Metal-Plast. This company is recognized as the leading recycler of PVC window and door profiles in Poland. Following this transaction, Eco Baltia holds 38.5% and INVL Baltic Sea Growth Fund holds 31.5% of Metal-Plast, while Family Foundation SIDN maintains a 30% stake in the company.

Metal-Plast, headquartered in Świebodzice, Lower Silesia, generates an annual turnover of approximately €34 million and employs about 200 individuals. The company currently possesses a recycling capacity of roughly 29,000 tonnes per year, with plans to increase this capacity by 50% to 45,000 tonnes, significantly enhancing its contribution to the circular economy. By recycling one tonne of PVC, two tonnes of CO2 emissions are saved, positively impacting the European Union's climate neutrality objectives.

Industry Overview in Poland

The recycling and waste management industry in Poland has witnessed significant growth due to increasing environmental awareness and regulatory pressures. The government has set ambitious targets for recycling and waste reduction, particularly in light of the European Union's stringent directives. This push creates an opportunity for recycling companies to innovate and expand their operations.

Furthermore, the emphasis on a circular economy has steered investments toward sustainable business practices. Companies that focus on recycling will not only contribute positively to environmental sustainability but also reap economic benefits, as resource efficiency becomes paramount in business models. This trend is fueled by growing consumer preference for eco-friendly products and services.

Poland, as the fastest-growing economy in Central and Eastern Europe, provides a fertile ground for investments in the recycling sector. The ongoing transition toward sustainability presents opportunities for both local and international investors looking to capitalize on the increasing demand for recycled materials. The presence of well-established players, like Metal-Plast, further strengthens this landscape.

The integration of advanced technologies in recycling processes is also enhancing operational efficiency and recovery rates in the industry. With growing competitive advantages, companies that adopt innovative recycling techniques are likely to thrive. Furthermore, the cooperation between governments, businesses, and financial institutions enhances funding opportunities for sustainable investments, ensuring long-term viability for the recycling sector.

The Rationale Behind the Deal

The acquisition of Metal-Plast by Eco Baltia and INVL Baltic Sea Growth Fund aligns with the strategic objectives of both entities, particularly their focus on expanding their footprints in the recycling and environmental sectors. By securing a major player like Metal-Plast, they enhance their operational capabilities and expand their influence in the European recycling market.

This deal not only supports their commitment to sustainability but also capitalizes on the increasing trends of recycling within the PVC market, especially in light of the upcoming wave of window replacements across Europe. This acquisition is expected to enhance profitability through increased operational capacity and offers significant growth potential.

Information about the Investor

INVL Baltic Sea Growth Fund is a significant equity fund in the Baltics, with a size of EUR 165 million. It seeks to support high-growth potential companies within the region, particularly in sectors like healthcare, civil engineering, and recycling. The fund is anchored by the European Investment Fund, which has committed EUR 30 million to bolster its investments.

The fund emphasizes building diversified portfolios by acquiring majority or significant minority stakes, aiming to make investments in the range of EUR 10 million to EUR 30 million. This strategic approach underlines their focus on capturing high growth opportunities in a competitive landscape, particularly within the Baltics and neighboring regions.

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This acquisition of Metal-Plast is seen as a strategically sound move that aligns with global sustainability trends, particularly in waste management and recycling. As a leader in the PVC recycling market, Metal-Plast offers significant growth opportunities, bolstered by the increasing need for sustainable practices in the European economy. Furthermore, the firm's intention to increase its recycling capacity shows foresight and the potential to tap into an expanding market.

Moreover, with INVL Baltic Sea Growth Fund's robust investment approach and Eco Baltia's established presence in environmental services, this partnership is positioned to leverage existing synergies effectively. By enhancing operational efficiencies and expanding market reach, they could significantly impact the reduction of plastic waste, thus capitalizing on the benefits of the circular economy.

Additionally, as the recycling industry in Poland continues to evolve, companies like Metal-Plast that embrace innovation will likely thrive, leading to an attractive return on investment. The growing public and governmental support for sustainable practices reinforces the viability of this investment, making it a promising opportunity for both Eco Baltia and INVL Baltic Sea Growth Fund.

In conclusion, the acquisition not only strengthens the market position of Eco Baltia and INVL Baltic Sea Growth Fund but also contributes to the development of a sustainable future. This strategic investment in Metal-Plast could yield significant returns and establish a lasting impact on the recycling landscape in Poland and beyond.

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