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Livonia Partners invests in fast-growing Bagfactory, a manufacturer of non-woven and paper bags to customers across Europe. The transaction is pending Competition Council approval, and is anticipated to conclude by the beginning of this summer.
Since the establishment of Bagfactory, the team has invested heavily in developing technologies for making environmentally-friendly carrier bags. Bagfactory produces lightweight bags from recycled materials that are long-lasting and can be reused, and, at end of their lifetime, can be easily collected and recycled using the available municipal recycling points.
According to Gvidas Krolis, the CEO and Co-Founder of Bagfactory, new investment from Livonia will allow Bagfactory to accelerate the already fast-paced growth of the company: “Every year, our output is multiplying. Last year, we manufactured 50 million multi-use environmentally–friendly bags, while in 2021 – 36 million. We have customers in 23 countries throughout the world, including well-known international brands and the largest retail chains in Europe. While looking for an investor, we had a lot of interest from international investors, however, we felt the strongest synergy with Livonia Partners. We share the same attitude towards sustainability, innovation, and business development – the main factors influencing our selection of a partner for the next stage of development.”
Gvidas believes that the upcoming years will result in significant growth for the company. Special attention will be given to closed loop circular processes including the collection, recycling, and manufacturing of materials and final products. The company also will consider the acquisition of other manufacturing and sales companies in the European Union and the United States, and opening of new sales offices abroad.
“We not only manufacture the bags, but we also design and build the machinery to automate the production process to enable the scale and efficiency needed to compete with less sustainable market alternatives. In 2022, with scientists from Kaunas University of Technology, we created a technological solution that will allow us to be the first in the world to manufacture carrier bags in an automated manner, from 100% recycled PET bottles. We will begin manufacturing these carrier bags this year. By the middle of 2023, we will also present another, more sustainable alternative to single-use plastic bags. I believe that we have every opportunity to become competitive leaders of sustainable innovation, not only in Lithuania but also abroad,” said the Chairman of the Bagfactory Board and the Co-Founder, Marius Rumbinas.
According to the founding partner of Livonia Partners, Mindaugas Utkevičius, there is no doubt that by joining the forces of Bagfactory and Livonia, Bagfactory will be raised to a higher level and will become a global market leader: “The Bagfactory investment is the fourth investment for Livonia Partners Fund II. We at Livonia are striving to forge partnerships with Baltic companies that have a strong growth potential. We believe in businesses whose products and services have a positive impact on people’s lives and the environment, and Bagfactory is precisely this kind of company.”
About Bagfactory:
Bagfactory was established in 2015, by its founders Gvidas Krolis and Marius Rumbinas, and it now employs 60 people. In 2022, Bagfactory’s annual turnover reached EUR 10.4 million, more than double that of 2021. Last year, Lithuanian National Radio and Television (LRT) nominated the company for an LRT Annual Award for its unique green solutions.
About Livonia Partners:
Livonia Partners is a pan-Baltic private equity investment firm that manages assets of over EUR 240 million. The Livonia team works across Estonia, Latvia, and Lithuania. Fund investors are Baltic and Nordic pension funds, the European Bank for Reconstruction and Development, the European Investment Fund (EIF) investing through the Baltic Innovation Fund 2 (an initiative created by cooperation between the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania, and the EIF) and others.
