Mid Europa acquires MCI-backed e-commerce platform Pigu

The deal is expected to complete in Q2 2021 and is subject to competition authority approval.

Pigu is also to acquire and merge with Estonia-based Hobby Hall Group (HHG), the GP said in a statement. The new group will serve markets in CEE and Finland.

Dainius Liulys, co-founder and CEO of Pigu, will take the role of CEO of the combined group.

Mid Europa will hold a majority stake in the newly formed entity, with MCI, Pigu's and HHG's founders owning a minority stake.

A source close to the situation told Unquote that the deal is valued at around €100m, with MCI making an investment of €37m.

MCI is investing in the newly formed group via its buyout fund, the GP said in a statement; the vehicle deploys equity tickets of €25-75m and focuses on businesses with enterprise values of €50-250m.

Mid Europa is currently deploying equity via Mid Europa V, which held a final close in January 2020. The vehicle writes equity tickets of €75-200m, targeting CEE-based businesses with enterprise values of €100-500m.

The GP has prior experience of investing in the e-commerce space in CEE: Mid Europa invested in Poland-based e-commerce platform Allegro in October 2016 alongside Permira and Cinven. Allegro listed on the Warsaw Stock Exchange with a market capitalisation of PLN 44bn (€9.8bn) in October 2020.

Previous funding
MCI acquired a 51% stake in Pigu in May 2015. The GP invested via its MCI.TechVentures fund, which held a final close in June 2008 on €80m, according to Unquote Data. The fund made equity investments of €1.5-25m, focusing solely on technology-based businesses in CEE, Russia and Turkey, as well as those in western Europe.

At the time of MCI's investment, Pigu generated revenues of €72m.

Estonia-headquartered Hansapost merged with Finland-based HHG in 2018, forming a group with revenues of more than €80m. Hansapost acquired 46% of the shares in Hobby Hall, according to a statement issued at the time.

Company
Founded in 2007, Pigu is an e-commerce platform used by more than 2,000 sellers. The company is headquartered in Vilnius, Lithuania.

HHG is headquartered in Tallinn, Estonia, and was founded in 1997. It operates "online department stores", serving Finland, Estonia and Latvia, and employing around 170 staff.

The combined companies will employ 600 staff.

People
Pigu – Dainius Liulys (co-founder, CEO).
Hobby Hall Group – Taavi Rajur (co-founder, CEO).
Mid Europa Partners – Kerim Turkmen (partner); Rustam Kurmakaev (principal); Aleksandar Dragicevic, Dragos Ardelean, Bogdan Bunea (investment executives).
MCI Management – Maciej Kowalski (senior partner).

Advisers
Equity – Porta Finance (M&A); Dechert (legal); Cobalt (legal); OC&C (commercial due diligence); Palladium Digital (technology due diligence); EY (financial due diligence, tax).

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• Topics
• Buyouts
• Exits
• CEE
• Consumer
• Lithuania
• Mid Europa Partners
• MCI Management