Abris acquires majority stake in Velvet Care from Avallon

Abris deployed capital from its latest vehicle, the Abris CEE Mid-Market Fund III, to secure the investment.

With the fresh capital, Velvet Care will increase its production capacity and acquire related businesses in the region. It also intends to pursue its strategic development in Poland, while also gradually building its position in export markets.

Under Avallon's ownership, the company has doubled its revenues and has invested PLN 250m in development, including the design of a new paper machine, which is considered a key project for ongoing growth. The production capacity of its Klucze factory has doubled and the demand for products has increased several times within the four years, according to Velvet Care.

The third mid-market fund raised by Abris, CEE Mid-Market Fund III, held a final close on €500m in September 2017. The GP typically makes equity investments between €20-60m in privately owned businesses in the CEE region, with a particular focus on partnering with local, entrepreneur-led businesses. The group operates from bases in Warsaw and Bucharest. 

The transaction remains subject to the standard approval procedure of Poland's Office of Competition and Consumer Protection.

Previous funding
Avallon first invested in Velvet Care in 2013, marking one of the first investments from the firm's Avallon MBO Fund II.

Company
Established in 1897 and headquartered in Warsaw, Velvet Care is a Polish manufacturer of tissue-based personal hygiene products.

The company produces toilet paper, kitchen paper and hand tissues, sold under the Velvet brand. It has 500 employees at two locations and posted a turnover of €78.6m in 2016.

People
Abris Capital Partners – Paweł Gieryński (managing partner).
Avallon – Tomasz Stamirowski (managing partner).
Velvet Care – Artur Pielak (CEO).

Advisers
Vendor – Trigon (financial due diligence).

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• Avallon MBO