Livonia Partners buys garden centre Hortes

Hortes is the second transaction funded by Livonia's maiden vehicle, Livonia Partners Fund I, which raised €70m at first close in August 2015 and is targeting €85m.

The GP will acquire 100% of the share capital in Hortes as part of the deal, taking over from Finnish investment company Trigon Capital and other Finnish investors. The deal was sourced through an exclusive process, triggered by conversations between a Livonia partner and the seller in the wake of an unsuccessful bid for another asset early in 2016.

Following its investment, Livonia plans to support the company's regional growth plans, led by incumbent CEO Kristian Kalgan. Livonia partner Rain Lõhmus told unquote" the GP will initially focus on expansion within Estonia, where management has already developed plans to establish a broader presence.

Depending on the success of Hortes's Estonian rollout, Livonia has looked at expansion into neighbouring Latvia as well as possibly Lithuania. Lõhmus said there are no similar concepts to Hortes's in the other Baltic countries and, consequently, the company's expansion would be driven organically rather than through acquisitions.

Currently, Hortes owns the real estate of the garden centre it operates, but the Livonia partner told unquote" there are plans to spin off its real estate and focus on managing operations. Hortes does not plan to buy the real estate of any future centres.

Financing has been provided by a Scandinavian bank operating in the Baltic region, supporting the buyout with an all-senior debt facility.

Lõhmus said the GP has a few exit strategies in mind for Hortes and that it would likely be a trade sale, though the exit route is dependent on the success of the company's expansion strategy.

Company
Hortes is an Estonia-based home and garden retailer founded in 2006 by Trigon Capital.

The company currently operates one garden centre in Laagri, near the Estonian capital of Tallinn. It generates €4-5m in revenues, with EBITDA of €800,000.

People
Livonia Partners – Rain Lõhmus, Kristīne Bērziņa (partners).

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