Our experience
Full-scope buy-side advisory on acquiring a major stake in JSC "Valmieras stikla šķiedra"
Client
Duke I S.à r.l. (a Luxembourg subsidiary of Warwick's European Opportunities Holding Fund III LP, managed by Warwick Capital Partners LLP)
Setting the scene: a mandatory buyout
Valmieras stikla šķiedra (“VSS”) with its subsidiaries is a leading European glass fibre manufacturer boasting more than 55 years’ experience in the glass fibre industry. In 2021, VSS shareholders decided to sell a majority stake of 84.07% to Duke I S.à r.l. (“Duke”). Duke is a Luxembourg subsidiary of Warwick European Opportunities Fund III LP, an alternative investment fund managed by Warwick Capital Partners LLP (“Warwick”). Warwick is a London-based investment manager focusing on European special situations and managing funds with aggregate assets under management exceeding EUR 2 billion.
Completing the transaction was subject to a number of conditions. The transaction perimeter excluded the company’s US subsidiaries and the deal involved restructuring its external debts, with competition matters and the mandatory buyout requiring regulatory clearance.
How we helped
PwC provided full-scope buy-side lead advisory, including business recovery, corporate finance, and tax services. We acted as a financial advisor responsible for the deal architecture and other financial and tax matters.
We assisted in setting all the necessary steps in the transaction and advised on its structure from a business perspective and taxwise.
We were responsible for the tax and financial due diligence phase.
We reviewed the terms of legal protection proceedings.
We prepared the mandatory buyout documents.
We created several financial modules for monitoring the company’s debt-to-equity ratio, business plan, and related-party debt.
We reviewed a foreign subsidiary’s pensions scheme.
We reviewed the relevant legal documents.
We monitored the company’s performance and short-term cash-flow projections.
We performed valuation for mandatory buy-out.
Impact
PwC advised Duke on acquiring an 84.07% stake in VSS. Besides the equity transaction, the company’s debt was restructured, with Duke replacing Danske Bank A/S as the second-largest secured creditor in what is considered one of the largest deals in Latvia over the past few years. This step and the associated financial support will help expand a leading European glass fibre manufacturer’s business model by providing investment for the next stage of growth aimed at expanding its range of products and strengthening its market position.
“The acquisition will enable a leading European manufacturer of glass fiber products to stay in business and strengthen its market position.”
Raimonds Dauksts
Managing Director of Advisory, PwC Latvia