Target Information

The Pehart Group, a prominent manufacturer of household and industrial paper products in Romania, has over 187 years of history and stands as one of the largest paper producers in Southeast Europe. The company's extensive product range includes toilet paper, paper towels, napkins, and jumbo rolls utilized in the industry. In 2024, Pehart Group aims to strengthen its market leadership while significantly improving production efficiency through strategic investments and a focus on product portfolio diversification, which recently included the introduction of new products like the SOVIO brand targeted at the public consumption sector.

The group's revenue reached €165 million in 2024, employing over 550 individuals across its operations. Pehart Group is recognized for its continuous growth, operational efficiency, and commitment to respecting environmental resources while solidifying its position as a leader in the paper products industry in the region.

Industry Overview in Romania

Romania's paper and pulp industry has shown resilient growth, characterized by increasing demand for sustainable and high-quality paper products. As the market evolves, companies are anticipated to implement advanced technologies that enhance production processes and product offerings. The government's support for sustainability initiatives and environmental regulations has prompted many producers to adopt more eco-friendly practices, further driving the industry's growth.

With Romania being a significant player within the Central and Eastern European market, it benefits from both regional economic expansion and increased consumer awareness regarding environmentally friendly products. This has led to high competition among manufacturers striving to innovate while meeting evolving consumer expectations. As a result, many companies are investing heavily in modernization and expansion strategies.

The shift toward sustainability and the expansion of the retail sector has fostered the rapid development of various paper products. Among these, sanitary paper products have displayed consistent demand, indicating a stable growth trajectory for the industry. Furthermore, increased export opportunities arise as Romanian paper products gain traction in international markets.

Challenges such as fluctuating raw material prices and the need for continuous improvements in production efficiency remain key concerns for industry players. However, the commitment to sustainability and technological innovation positions Romania's paper industry favorably for potential foreign investment and long-term success.

The Rationale Behind the Deal

The acquisition of Pehart Group by INVL Baltic Sea Growth Fund, supported by a consortium including the International Finance Corporation (IFC), Banca Transilvania, and ING Bank Romania, represents an investment of over €150 million with an emphasis on sustainability initiatives. This strategic acquisition aims to accelerate Pehart Group's growth trajectory, enhance its production capacities, and cement its leadership in the region's market.

By leveraging the expertise and vision of INVL Baltic Sea Growth Fund, the deal is anticipated to bring substantial benefits to Pehart Group, allowing for further diversification of products and expansion into international markets. The focus on sustainable practices aligns with industry trends, paving the way for increased efficiency and profitability.

Information About the Investor

INVL Baltic Sea Growth Fund is a leading private equity fund in the Baltic region, primarily backed by the European Investment Fund (EIF). Managing a portfolio valued at over €1.9 billion, INVL focuses on investments that contribute to sustainable economic growth across Central and Eastern Europe. The fund aims to support ambitious and high-potential companies through tailor-made financial solutions and strategic partnerships.

The partnership with Pehart Group aligns with INVL's strategic intent to bolster regional economies and foster innovation within rapidly growing sectors. With a vast experience in managing investments across various industries, INVL Baltic Sea Growth Fund is well-positioned to guide Pehart Group through its next phase of growth and development.

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This acquisition is viewed positively within the investment community as it represents a significant opportunity for both Pehart Group and INVL Baltic Sea Growth Fund. The deal is poised to enhance Pehart's production capabilities and market competitiveness, providing the financial and strategic support necessary for the firm to scale operations effectively.

Given the steady growth trajectory of Romania's paper industry and increasing consumer demand for sustainable products, this investment aligns closely with market trends, suggesting a favorable outlook for future returns. The emphasis on sustainability not only positions Pehart Group advantageously within the industry but also resonates with contemporary investor values focused on environmental responsibility.

Moreover, the strategic partnership with INVL Baltic Sea Growth Fund signifies an alignment of interests and expertise, which is crucial for navigating the competitive landscape of the paper products market. The potential for expansion into international markets further underscores the attractiveness of this investment.

Overall, this deal embodies a promising growth trajectory for both parties, with Pehart Group expected to benefit significantly from INVL's extensive support and resources. As the partnership evolves, the collective efforts toward sustainability and innovation will likely yield lasting positive impacts in the region.

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