Baring Private Equity Partners’ purchase of Syktyvkar Forest Enterprise is the largest-ever acquisition of a formerly state-owned Russian company, according to Baring’s Mike Calvey, the managing partner of the Baring Vostok Private Equity Fund and a member of the board of directors of both Baring Vostok and Vostok Capital.
“This is the largest ever M&A transaction of a state-owned company into a private company post-Soviet Union,” said Calvey.
The investment was realized in 2002 for $36 million via a trade sale from parent company Mondi Group, and BPEP’s Russian fund was the lead investor in a consortium that collectively owns 70% of the company. Baring Vostok typically invests in buyouts of energy, telecommunications, media services and consumer products companies.
Syktyvkar was one of the last paper and pulp plants built by the Soviet Union, and its relatively modern equipment has given it a competitive advantage against many domestic and international competitors.
“This is unique in Russia,” said Calvey. “It’s the first true success story in restructuring a formerly state owned company into a competitive international player in the paper industry.”