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Juridiskie pakalpojumi


Review of M&A deals in Latvia and the Baltic states for the year 2023

The year 2023 witnessed a decline in the number and value of Latvian and Baltic M&A (Mergers and Acquisitions)  The war in Ukraine, energy risks, supply chain disruptions and inflation have continued to pose challenges for deals, as in previous years. Additionally, this year has seen new hurdles, such as rising interest rates, higher capital costs, uncertain macroeconomic outlook and the Middle East turmoil.

Whenever faced with difficulties, new opportunities arise and bold decisions are made, which is why entrepreneurs and investors apply creative deal structures and activate local deals, using local market knowledge and saved up capital.

Bond issues and private capital injections have also picked up. More and more local entrepreneurs are using capital-raising mechanisms, optimising and diversifying their sources of finance.

Along with shifting geopolitical landscape and tighter regulatory scrutiny on business activities, due diligence is becoming increasingly important before any transaction. This includes an assessment of sanctions and anti-money laundering risks that may arise from transactions.

Sustainability (ESG) considerations are now an important part of major deals, keeping up with Europe’s ambition to lead the world in achieving climate neutrality by 2050. According to Mergermarkets’ recent survey on European corporate activity in 2024, respondents believe that businesses are more likely to focus on ESG issues (28%), demand changes in governance structure (26%) and changes in the board or senior management (20%).

In recent years, investment volume in the energy sector have been among the largest in terms of total transactions. Opportunities to deploy capital in the energy sector are expanding, for example the European Investment Bank (EIB) and Luminor Bank AS signed a EUR 115 million financing agreement to further boost lending to small and medium-sized enterprises in Latvia, Estonia and Lithuania. The loans are designed to promote development in the Baltic region, with a particular focus on supporting the transition to a green economy. It can be predicted that projects to develop offshore and onshore wind farms, solar, thermal, hydrogen, battery storage, new electricity grids and industrial decarbonisation (e.g. cement, glass and steel) are expected to continue.

Energy projects touch upon other spheres, for example technology companies, focusing on energy-hungry data centres, transport electrification and the IoT or Internet of Things.

The International Energy Agency (IEA) estimates that global investment in clean energy alone will need to increase from USD 390 billion in the first half of 2023 to USD 1.3 trillion in 2030, with large-scale projects and deals expected in the green energy and related sectors.

Despite the lack of record-braking transactions, looking back to 2023, the publicly available information on the significant deals in Latvia are notable for the following:


  1. In December 2023, a transaction was finalised whereby a local investment bank Signet Bank AS acquired LPB Bank AS. “LPB Bank” made a profit of EUR 789,000 in the first nine months of 2023. The bank had assets of EUR 168 million at the end of September 2023;
  2. Latvijas gāze has entered into a definitive agreement on the sale of its subsidiary Gaso to the Estonian company Eesti Gaas. Latvijas Gāze will receive an equity consideration of EUR 120 million and interest until the completion of the transaction;
  3. The management of Latvijas Gāze, Aigars Kalvītis, Elita Dreimane and Egīls Lapsalis, have acquired 28.97% of the shares of Latvijas Gāze with the help of Rietumu Banka. The transaction was concluded between the Luxembourg investment fund Marguerite Gas II and Energy Investments for the buy-back of all the shares held by Marguerite Gas II. The value of the transaction is EUR 111 million;
  4. “Printful” acquires “Snow Commerce”, a company whose clients include world-famous brands such as Paramount, NBCUniversal and others. This is the first time Printful has acquired another company. The amount of the transaction is not disclosed, but Snow Commerce’s annual revenue is estimated at USD 12.9 million;
  5. Estonian wood pellet producer Warmeston OÜ has signed an agreement to purchase the Brocēni CHP plant and pellet factory in Latvia from Enefit Green. As part of the transaction, Warmeston OÜ will acquire a 3.98Mwe/15.9 MWt biomass cogeneration plant and a production facility producing approximately 155 tonnes of wood pellets per year. The two plants employ 39 people. The electricity produced is sold on the Latvian market and the heat is used in the pellet plant. The wood pellets are sold to energy companies, wholesalers and other consumers. The value of the transaction, net of cash and debt, is EUR 32 million;
  6. 888 Holding Plc, a betting and gaming company, has agreed to sell its indirect shareholdings in two Latvian companies, Mr Green Latvia SIA and William Hill Latvia SIA, to Paf Consulting Abp, a Nordic gaming company. As part of the transaction, Paf will acquire 100% of the shares in William Hill Latvia SIA together with its subsidiary Mr Green Latvia SIA. With this acquisition Paf will become the third largest gambling company in the Latvian market. The total transaction amount is up to EUR 28.25 million;
  7. Digital Mind, a Latvian technology company, acquires EIP Dynamics, a Polish company. The company has offices in Riga, Vilnius, Warsaw and Tallinn and currently serves more than 350 organisations in the region, employs around 180 people and has revenues of around EUR 14 million in 2023. The company operates under the Alna Business brand in the Lithuanian an Polish markets;
  8. Aktiva Finance Group, a leading player in the Baltic debt recovery and purchase market, acquires Intrum Baltics’ servicing platforms and investment portfolios for EUR 30 million. The transaction includes the acquisition of 100% of the shares of Intrum Estonia AS, Intrum Latvia SIA and Intrum Lithuania UAB;
  9. INVL Baltic Sea Growth Fund, together with its portfolio company Eco Baltia, has entered into an agreement to acquire a 70% stake in Metal-Plast. Metal-Plast is the largest processor of PVC window and door profiles in Poland. Metal-Plast has an annual turnover of EUR 34 million and 200 employees;
  10. BaltCap Private Equity Fund III and investment firm Draugiem Capital have signed an agreement to acquire a majority stake in Latvia-based multi-industry manufacturing company Pepi Rer SIA to facilitate the company’s global expansion. Pepi Rer is known for its children’s soft toy brand IGLU, floor insulation brand ProVent and the production of building and packaging materials;
  11. Jakala, the marketing technology company of the Ardian Buyout group, acquires a majority stake in Roibox, a Latvian marketing data analytics start-up. The amount of the transaction is not disclosed, but Roibox raised EUR 3 million in capital in the previous years. The Italian company Jakala has a turnover of more than EUR 500 million per year;
  12. Mapon, a developer of fleet management technologies, announced the acquisition of CarCops, an Estonian telematics company. The merger will make Mapon one of the largest developers of fleet management solutions in Estonia.

Capital raising:

  1. Amber Beverage Group’s EUR 30 million four-year senior secured bond issue for the construction of a modern warehouse at the Port of Riga;
  2. Rietumu Banka has provided loans of EUR 25 million to Astor Group companies engaged in the management and development of major hotel properties in Riga such as Radisson Blu Daugava, Radisson Blu Rīdzene, Park Inn by Radisson Valdemara, Park Inn by Radisson Residence Riga Barona and Radisson Hotel Old Town Riga. The financing was provided for working capital, further development and refinancing of short-term liabilities;
  3. Non-bank lender DelfinGroup entered into an EUR 11 million credit line agreement with Multitude Bank of Malta to diversify its sources of funding as well as its equity capital, allowing the company to remain flexible, manage risks efficiently and optimise costs. In addition, at the beginning of November, the company registered a new issue of EUR 15 million of unsecured closed offer bonds and refinanced EUR 10 million of bonds maturing in November 2023. The new bonds have a coupon rate of 9% plus 3-month EURIBOR with a maturity of three years;
  4. Storent Holdings, a construction equipment rental company, has raised EUR 10 500 000 in a public bond offer. The Storent bonds are listed for trading on Nasdaq Baltic Bonds from 27 June 2023;
  5. Eco Baltia AS has completed its second three-year bond issue of EUR 10 million, which was made as a private placement. The issue attracted strong investor interest, with total demand exceeding the issue size by 1.7 times and orders received from over 100 institutional and retail investors in Estonia, Latvia and Lithuania;
  6. The investment management company Indexo raises EUR 9 million in a share issue to establish a bank;
  7. Aerones has received a EUR 4.4 million grant from the European Union’s Innovation Fund for highly innovative, scalable and ambitious infrastructure projects aimed at reducing CO2 emissions. The total project budget is EUR 7.36 million. Previously, Aerones has raised USD 39 million in capital to expand Aerones’ technical and sales functions, increase the number of robot service teams and expand into new high-growth markets, including Africa and Australia;
  8. Naco Technologies has been awarded a EUR 2.3 million grant from the European Innovation Council’s EIC Accelerator programme. The total amount of funding is EUR 10 million. At the end of 2023, Naco Technologies raised a further EUR 1.2 million investment from Impact Ventures and The Untitled Ventures;
  9. Monetizr, an advertising technology start-up based in Latvia, raised a USD 4 million investment in the summer. Change Ventures, Ludus Ventures and Techstars invested in Monetizr in this round. This round is also joined by angel investors Ari Paparo, CEO of Marketecture Media and former CEO of Google and Beeswax, and Jared Schribers, founder of InfoScout. The company will use the funding to expand its sales team in the US and establish development centres in Riga, Helsinki and London;
  10. A Latvian start-up Supliful, which manufactures and delivers cosmetics, nutritional supplements and packaged food products on demand, has agreed on a mezzanine loan of up to EUR 2 million with FlyCap, a venture capital fund. The money will be invested to tenfold turnover to USD 50 million in the next year.


In 2023 the global M&A market experienced a decline in both volume and value compared to the previous year. Despite further macroeconomic and geopolitical challenges, M&A activity is expected to increase, signalling the end of one of the worst “bear” markets for M&A in the last decade. Although the battle against inflation has not yet been won and the European Central Bank is not yet in a hurry to cut interest rates, the peak in the cost of money seems to have been reached.

According to audit firms, the M&A market will enter a new phase in 2024 and different from the previous ones. Deal growth looks more moderate than in 2020 and 2021, when we saw a sharp increase in transactions. 2024 is expected to face a different environment to previous years and will require adaptability. For example, while credit markets are active, financing is more expensive than in the last decade. Higher cost of capital levels will put pressure on valuations and require businesses to create more value to deliver the same returns to investors as in the past.

Latvia is not disconnected from global economic processes, but there is a greater involvement of the state in capital flows – both through the planned listing of shares in state and municipal companies on the stock exchange and support for the development of various “green” and innovative products. Entrepreneurs with the ability to assess risks and a plan for different scenarios will be in a safer position than those who expect more certainty.

February 5, 2024 by Reinis Sokolovs, Partner

Juridiskie pakalpojumi

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