Estonian private equity firm buys local healthcare company

BaltCap Management, a private equity firm focusing on middle market buyouts and expansion capital investments in the Baltic States, acquired a 75 percent stake in Estonian medial diagnostic provider Quattromed HTI Laborid.

Although terms of the transaction were not disclosed, Peeter Saks, managing partner at BaltCap, confirmed that the deal size was under €20 million ($29 million). BaltCap acquired the firm from Finnish biotech firm MediCap Holding OU, for which Quattromed “was not a core business”.

From his perspective, though, Saks saw Quattromed as an opportunity to take a company with a dominant market share in its home country and grow it regionally.

“Markets in healthcare are about to pick up in the Baltic States, so we see a lot of add on acquisitions,” Saks said.

Speaking more broadly, Saks thinks the Baltic States – Estonia, Latvia and Lithuania – are poised for a boom in private equity investing.

“When we started, the Baltic economies were very fresh. Everything needed to be built. As markets have developed, more and more companies are around, with time coming up for generational shifts or changes in management or making a local company a regional company. That’s why we see more and more buyouts coming up,” Saks said.

The deal marks BaltCap’s second investment from its fifth fund, which currently has €58 million in commitments but is targeting a €100 million final close. Earlier this year, the European Bank for Reconstruction and Development, which has participated in three of BaltCap’s previous funds, said that it would commit up to €20 million to the fund.

Other investors in BaltCap’s funds are primarily European investors, concentrated in Scandinavia and the UK. However, Saks adds that he sees “more and more interest coming from continental Europe” and “some interest from Asian and US investors, so it is broadening”. The firm’s placement agent, Axon Partners, is based in the UK.

BaltCap was founded in 1995 and to date has made 38 investments, 23 of which have been exited. Most recently, it invested in Interinfo, a directory provider in Central and Eastern Europe. 

Saks said since the firm is industry-agnostic because the Baltic economies are not yet large enough to support a sector-specific investment strategy.