Civinity invested in Latvia and preparing for stock exchange

The deal was completed in the end of July; its value has not been disclosed. The acquisition was co-funded by the Latvian Bank Citadele.

Chairman of the Board of Civinity Group Giedrius Jakubauskas said to VŽ: “After completing this acquisition we became the largest privately owned group of companies administering households in Latvia”.

Hausmaster is the largest privately-owned apartment block maintenance company in both Latvia and Riga. Its annual income amounts to nearly 9 million Euro, and the area of administered apartment blocks exceeds 720,000 square meters.

After the acquisition Civinity Group owns 3 companies in Latvia: Jurmalas Namsaimnieks acquired in 2014 and recently acquired Hausmaster and HomeMaster. The Group’s companies provide services in Riga, suburbs of Riga and Jurmala.

thanks to this transaction Hausmaster clients will receive better quality services, the range of services will be expanded and prices will not increase for sure,” promises Mr. Jakubauskas.

Purpose - market consolidation

Civinity intends to continue the programme of acquisitions in Latvia.

Mr. Jakubauskas states: “Market consolidation in Riga and Latvia is one of our strategic goals. We are seeking to acquire companies of private administrators and become a market leader”.

According to him, negotiations are currently going on with a number of shareholders of private administration companies and even this year is expected to announce new acquisitions in Latvia.

The Estonian market is under research as well. However, no acquisitions are planed yet, just market exploration.

“Currently, the most active acquisitions are in Latvia, as it is an emerging, growing market. The Latvian market of administration services according to its structure and approach is about five years lagging behind Lithuania’s. Certain processes, which took place in Lithuania five years ago, such as transfer of administrative services to private sector, programme for renovation of block houses and other, in Latvia is only now starting to gain a more concrete form,” tells interviewer.

Named the differences

Most of the companies providing administration services in Lithuania’s major cities have been privatized long ago.

While in Latvia the major share of this sector is still in the hands of municipalities - most of administered area belongs to municipality-owned companies.

“Exception is Riga, where the largest market player is municipal company, but still there are quite a number of private providers operating there”, says Jakubauskas.

Main difference of the Lithuanian and Latvian market, he says, is the fact that tariffs for administration services in Latvia are higher than in Lithuania, and clients pose much higher requirements for quality and volume.

“Another difference is less regulated relations between a client and an administrator in the neighbouring country. When setting tariffs in Lithuania both municipalities and the Government, including the Ministry of Environment, are very active”, tells Jakubauskas.

Plan – double income

Currently, the Group manages 14 household management and maintenance companies in Lithuania and Latvia. In Lithuania, the Group’s companies provide services in Vilnius, Kaunas, Klaipeda, Palanga and Kretinga.

“In the Lithuanian market we are the second largest player,” says Jakubauskas.

In 2015, Civinity Group’s consolidated revenues amounted to 15.09 million Euros. Total area administered by the Group was 3.5 million square meters.

Jakubauskas explains: “If we complete another acquisition this year we plan that in 2016 consolidated revenues are expected to rise up to 35 million euro and the area administered in the end of the year is expected to reach 4.9 million square meters”.

Acquisitions, most of all, increase the Group’s revenues. New services have a positive push to earnings as well, such as waste collection in the city of Jurmala, Latvia, or administration of intensively carried out renovation works in Lithuania.

In horizon - stock exchange

One of the Civinity Group’s goals is stock exchange.

In 2016, Civinity is planning a reorganisation: from UAB to be become AB in continuing its preparation to issue shares and present itself to investors on the stock exchange.

“We are planning to enter the exchange not earlier than 2017 and only in case of favourable environment”, tells Jakubauskas.

Civinity Group is managed by the Estonian company Civinity OU.

Published in http://vz.lt/sektoriai/paslaugos/2016/08/09/civinity-investavo-latvijoje-ir-rengiasi-i-birza#ixzz4Gotb5nMI