V4C Acquires Polish Waste Management Company
Value4Capital, the lower mid-market Polish and central European buy-out manager, announced the acquisition of Kom-Eko S.A (Kom-Eko) by its V4C Poland Plus Fund (the Fund). Kom-Eko is the leading waste management company in the Lublin area of Poland, with activities including municipal and commercial waste collection, sorting and processing centres and landfills in Lublin and Krasnik (www.kom-eko.pl). Royalton Partners’ Royalton Capital Investors II was the seller, fully exiting the investment after 7 years of stewardship.
V4C is supported in the acquisition by co-investments from some of the Fund’s investors, including the European Investment Bank Group (EIB Group). Alpha Associates has also committed to the transaction through its fund-of-funds Alpha CEE Opportunity IV, LP. mBank S.A. has provided an acquisition facility to complement the equity commitments. Transaction terms have not been disclosed.
EIB Group’s financing will, inter alia, support Kom-Eko’s investments into new waste sorting technology in order to increase the dry waste recycling levels as required by the municipalities in order to fulfil higher required recycling ratios set by the EU regulators.EIB Group’s co-investment, as well as the investment in the Fund by its sister institution, the European Investment Fund, benefits from financial backing from the European Union under the European Fund for Strategic Investments (EFSI), further to an agreement on the management of the EFSI and on the EU guarantee to be provided by the European Union entered into on 22 July 2015 by the EIB and the European Union.
Piotr Misztal, partner at V4C and transaction leader, commented: “Kom-Eko is a perfect match to the Fund’s strategy: a service business holding a leadership position in their region, where we can team up with management to take the business to the next level. We will actively look at consolidation opportunities to strengthen the footprint of the business in Poland while seeking to enhance current operations. We expect Kom-Eko to continue to focus on increasing the amount of waste it is able to sort and recycle, reducing landfilling and helping its clients meet their objectives of better management and valourisation of waste.”
The Fund held its latest closing earlier this year at Euro 80 million of commitments. V4C expects to complete fundraising in the coming months. Mr. Misztal noted: “The deal pipeline in the lower mid-market is currently very strong. We are actively advancing on other transactions where we have been able to identify companies with strong growth potential and acceptable pricing. Our ability to assemble a portfolio with this combination is proving of interest to global investors looking for differentiation in their private equity investments away from the large buy-out segment.”
V4C focuses on buy-outs, often in owner succession situations, where its pro-active involvement can accelerate the growth of the business. The firm specialises in service businesses, looking for opportunities where the service has a strong local delivery component. It focuses on Poland, but selectively invests in Romania, the Baltics and the other EU member states of central Europe.
The V4C deal team included Rafał Ałasa and Bill Watson. They were advised on legal aspects of the transaction by CMS in Warsaw and Luxembourg. Financial due diligence was undertaken by EY Warsaw. Royalton’s team was led by Ivan Vohlmuth with Rothschild providing transaction advice and Allen & Overy Warsaw providing legal advice.
Source: Value4Capital Press Release