Baltic Transaction Market Trends: The First Half of 2022 - Lithuania

Baltic Transaction Market Trends: The First Half of 2022 - Lithuania

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As the main trends of the transaction market in the first half of 2022, the boom of startups and the changes in their valuations, the undiminished confidence of foreign investors despite the geopolitical situation, and the ongoing consolidation of the health care and renewable energy sectors can be singled out.

In the ongoing negotiations for venture capital deals, valuations can be seen falling. This corresponds to a trend on a global scale (a clear example of this is the case of Klarna). However, it is not clear from public information at which financing stage this trend is more pronounced: in Lithuania, it is observed in some smaller transactions, when startups that have not yet gained "weight" in the market seek to attract financing. Market leaders recorded record amounts in the first half of the year, for example Vercom, listed on the Warsaw Stock Exchange, acquired the e-mail marketing platform MailerLite for EUR 84 million, and the payment platform kevin. raised USD 65 million in the Series A funding round.

On the other hand, despite the geopolitical challenges, strategic investors show confidence in the prospects of Lithuania and the entire Baltic region. Major deals in the manufacturing sector are the best confirmation of this: Norway's Kongsberg Defense & Aerospace, the largest Nordic space technology company, acquired 77% of Lithuanian small satellite developer NanoAvionics, and BEWI, one of the world's largest packaging and insulation solutions companies, acquired 100% of Baltijos polistirenas shares.

One of the sectors showing the most pronounced consolidation trends is healthcare services. The largest transaction completed in Lithuania in this sector so far is the merger of the private medical business networks "InMedica" and "MediCA Group". At least three active consolidators operate in the market - Affidea, Innova Capital Group (which acquired the shares of the largest dental network in Lithuania, Clinic DPC) and INVL Baltic Sea Growth Fund (which, among other transactions, signed the acquisition of the Nemunas and Eglės sanatorija clinics). The latter fund is also active in other sectors: it has been consolidating the waste management sector in the Baltic countries for some time, and also acquired the business of one of the largest life insurance companies in Finland, Mandatum Life, in Lithuania, Latvia and Estonia. Consolidation of the pharmacy sector is taking place both on a Baltic scale (Magnum's acquisition of the Apotheca pharmacy chain) and on a wider regional level (Euroapotheca establishing a joint venture with Oriola Corporation, which will combine the pharmacy business of both countries in Sweden).

The renewable energy sector is active in terms of both development and acquisitions. The Danish renewable energy company "European Energy" intends to invest about EUR 1.5 billion in Lithuania by 2024 and build wind and solar power plants with a total capacity of more than 1,000 MW, and "Green Genius" has acquired 100% of the shares in the company, which has the right to develop an 85 MW wind power park in Jurbarkas district.

Transaction market trends in Estonia.

Transaction market trends in Latvia.

By Juozas Rimas, Partner, COBALT