Information on the Target

Velvet CARE, based in Klucze, Poland, is a leading manufacturer of paper-based personal care products. Established in 2013, the company has a rich history extending back to 1897, having undergone ownership by notable firms such as International Paper and Kimberly Clark. Velvet CARE specializes in a range of hygiene products, including tissues, toilet paper, and kitchen towels, and is known for its highly regarded Velvet brand.

Under the management of Abris Capital Partners, Velvet CARE has experienced exponential growth, increasing its sales by 2.5 times and EBITDA by more than five times. The company also expanded its export operations fivefold, significantly surpassing the original investment expectations. A significant milestone was the acquisition of Moracell, the leading manufacturer in the Czech Republic, which further enhanced its market position.

Industry Overview in Poland

The hygiene product manufacturing industry in Poland has shown robust growth in recent years, spurred by increases in consumer demand for personal care items and heightened awareness of hygiene, particularly due to global health concerns. With a well-established market and growing consumer disposable incomes, companies in this sector are well-positioned to capture increased market share.

Poland's paper product manufacturing benefits from a strategic geographic location in Central Europe, facilitating easy access to neighboring markets. This has encouraged both domestic and international companies to invest in the region, fostering competitive landscapes that drive innovation and sustainability practices.

Moreover, the increasing emphasis on sustainable practices and ESG compliance among consumers is shaping the industry, pushing companies toward adopting eco-friendly materials and manufacturing processes. The accreditation of businesses by organizations such as B Corp signals a shift toward greater social and environmental accountability.

As of 2023, the demand within Poland for sustainable paper hygiene products is projected to continue rising, aligning with the global trends towards sustainability and responsible consumption, thus creating ample growth opportunities for key players in the market.

The Rationale Behind the Deal

The decision by Abris Capital Partners to sell Velvet CARE to Partners Group aligns with their strategy to monetize investments after achieving significant operational improvements and enhanced market positioning. During Abris' tenure, Velvet CARE transformed into a vertically integrated leader in the personal care market, catering to the growing demand in Central Europe.

Additionally, the acquisition comes at a time when Velvet CARE is poised for further expansion. With its successful ESG initiatives and strong financial performance, the company presents an attractive investment opportunity for Partners Group, who intends to leverage its resources to drive additional growth in the European market.

Information About the Investor

Partners Group is a renowned global private markets firm, specializing in private equity, real estate, infrastructure, and debt investments. With a robust track record of identifying and investing in high-quality businesses, Partners Group aims to create sustainable value for its portfolio companies.

The firm emphasizes a collaborative approach to partnerships, working closely with existing management teams to foster business development, expand market reach, and implement significant operational improvements. Their commitment to responsible investing aligns well with Velvet CARE’s long-term vision and sustainable business practices.

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This transaction appears to be a strategic and promising investment for Partners Group. With Velvet CARE's solid market position and impressive growth trajectory, the firm is well-positioned to capitalize on the demand for hygiene products across Europe. The company's past performance under Abris is indicative of its strong operational capabilities, suggesting that with proper guidance, it can continue to grow.

The anticipated collaboration between Velvet CARE and Partners Group could facilitate further innovation and operational efficiency, enhancing the company's market offering. Additionally, the growing emphasis on sustainability and ESG standards will likely resonate positively with consumers, providing a competitive edge in a dynamic market.

Looking forward, the consolidation trend in the paper and hygiene product sectors presents an extraordinary opportunity for Velvet CARE. As the company seeks to expand its footprint in Central Europe and beyond, it stands to benefit from its foundation built on high-quality products and operational excellence.

Overall, this acquisition could represent a fruitful avenue for growth and expansion, solidifying Velvet CARE's position as a European leader in the personal care sector.

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