BaltCap Growth Fund (BGF) will invest close to €3 million of growth capital in Viru Haigla AS in order to expand the Pihlakodu chain of modern elderly care homes, and increase the number of beds to one thousand over the next four years.
According to BaltCap’s Associate Director Sten Sonts, Estonian social care services for the elderly have not seen much development during the past few decades, whereas general welfare has grown significantly during the same period.
„In less than a year, Pihlakodu has set a new industry standard in elderly care, and given the demographics in Estonia, this is an industry with a clearly growing demand offering an attractive long-term investment opportunity,” explained Sonts.
„As soon as we complete the modern Pihlakodu home in Tabasalu which can accommodate 200 residents, we plan to start building another one in Viimsi,” said Igor Pihela Snr, Chairman of Viru Haigla AS Supervisory Board describing the next steps of the company. „Our objective is to use the investment to reach one thousand nursing home places during the next few years and strengthen our leading position as provider of quality social care services in Estonia,” he noted.
This is the first investment of BaltCap Growth Fund (BGF) in Estonia. €3 million will be invested in combination of equity and debt. As a result of the transaction, BaltCap will acquire a minority shareholding in Viru Haigla AS whereas Estonian Medical Group owned by Estonian investors Igor P ihela Snr, Igor Pihela Jr, Priit Pihela and Ermo Kosk continues as the majority shareholder. The Group is financed by LHV Pank.
Pihlakodu is the leading chain of modern elderly care homes in Estonia, providing social care services in Tapa, Kohtla-Järve and since last year also in an elegant building in the historic Nõmme district of Tallinn. Once the Tabasalu elderly care home is completed in September, the chain can offer almost 500 nursing home places for the elderly.
The investment in Viru Haigla AS is not the first growth capital investment by BaltCap related to the healthcare and healthy living. In 2019, BaltCap Growth Fund invested into Livinn/Biosala, the leading chain of organic products in Lithuania. In 2018, the predecessor growth capital fund by BaltCap Lithuania SME Fund sold InMedica, leading chain of 18 primary care and specialized outpatient clinics in Lithuania to INVL Baltic Sea Growth Fund. The same fund still owns the operator of 29 Lemon Gym and Impuls fitness clubs.
BaltCap established BGF in cooperation with the Baltic Innovation Fund (BIF) to invest in rapidly growing sector leaders. BIF is a fund-of-fund created by the Estonian, Latvian, and Lithuanian governments and the European Investment Fund (EIF) to boost equity investments into Baltic companies.
For more information, please contact:
Associate Director, BaltCap