We invest in mezzanine transactions in Estonia, Latvia, Lithuania and Poland

BPM considers buy-outs, growth capital and capital restructuring transactions.

BPM backs proven business models and experienced management teams.

Our story

BPM capital is one of the few funds dedicated to mezzanine investments in the region.

BPM Mezzanine Fund was founded in the end of 2014. It is managed by a team of four partners Kalmer Kikas, Martin Reinson, Priit Veering and Pawel Zabrzycki, all with extensive experience in mezzanine investing and an established contact network in the target region.

BPM is operating out of two offices in Tallinn, Estonia and Warsaw, Poland.

BPM is one of the few funds dedicated to mezzanine investments in the region.

BPM Mezzanine Fund has capital commitments of EUR 70 million, supported by a prominent investor base, which includes among others, the European Investment Fund and the European Bank for Reconstruction and Development.

BPM is the member of EstVCA.

Strategy

BPM seeks to provide mezzanine financing to companies with strong track record and excellent management practices in need of buy-out or expansion capital.

Clients

Small and medium-sized enterprises and lower midcap companies with strong track record and excellent management practices. BPM does not invest in start-ups and turnaround situations, as well as in listed companies and real estate.

Region

Estonia, Latvia, Lithuania and Poland.

Sectors

BPM has no sectoral focus and can consider a wide range of opportunities, excluding, however, tobacco, alcoholic beverages, firearms and gambling related businesses.

Mezzanine loan components

Typically mezzanine loans have 3 components: cash interest, payment-in-kind interest (PIK) and equity kicker/additional interest.

Day-to-day management of portfolio companies

BPM is purely financial investor, which means that BPM does not take active role in managing portfolio companies. BPM believes that management teams who have successfully run respective companies for years are more competent than BPM team members in managing their business. BPM will follow the financial performance of portfolio companies on a monthly basis. BPM team is motivated to support the investee in every possible way as one part of the Fund’s return is dependent on equity kicker.

BPM is committed to being a responsible investor.

Mezzanine

Mezzanine is an instrument which combines the characteristics of both debt and equity. With the help of mezzanine, the borrower/entrepreneur can:

  • Retain control over the company
  • Decrease or fully avoid dilution
  • Improve return
Advantages of mezzanine loan for an entrepreneur
  • Mezzanine investor might be willing to provide capital in a situation where bank financing is not available due to lack of hard assets to be pledged or too high leverage.
  • Second rank asset pledges behind senior lenders and/or share pledge are accepted. Sometimes personal guarantees are necessary.
  • With mezzanine loan the control over the company remains with the entrepreneur and dilution is limited or avoided, often the opposite with equity investors.
  • Mezzanine loan has less impact on cash flow as compared to senior debt through bullet repayment structure.

Mezzanine ranks behind senior debt in seniority, hence bearing higher risk. Increased risk
tolerance is compensated by higher returns in comparison to bank financing.

Portfolio investments
  • BPM does not invest in enterprises engaged in any of the activities appearing on the EBRD Environmental and Social Exclusion List and Category A list.
  • We have pre-investment review, investment portfolio monitoring and reporting process where besides financial and commercial factors all relevant environmental, social and governance issues and risks are considered.
  • We believe that ESG factors such as corporate governance, business relations, social and environmental responsibility, as well as customer and employee satisfaction are important for long term sustainability and good business results of our portfolio companies.
People
  • We comply with relevant regulations governing the protection of human rights, occupational health and safety standards and labour, environmental and business practices of the jurisdictions in which we conduct our business.
  • We offer an international and dynamic work environment, where every employee has an opportunity to develop its professional skills. Our goal is to have committed and motivated staff.
  • In our operations we are committed to provide employee-friendly work environment, based on non-discrimination, equal treatment and good work-life balance.
  • Employees and Partners are trained to ensure that everybody works in accordance with the approved Responsible Investment Policy.

Team

BPM Capital has been founded and is managed by a team of four partners, who have extensive experience in mezzanine investing in the region.

Kalmer Kikas
Managing Partner
Külli Kalamäe
Financial Manager

Our offices

Estonia

Roosikrantsi 11, 10119, Tallinn
+372 605 0073
info@bpmcapital.eu

Poland

Zajęcza 15, 00-351, Warsaw
+482 2244 1109
info@bpmcapital.eu

Latest news

BPM Mezzanine Fund completed the 5th exit since August 2020 and exited its investment in ecommerce & POS solutions provider iDS

BPM Mezzanine Fund SICAV-SIF, SCA (BPM) provided financing for an acquisition of a point of sale (POS)solutions provider iD Süsteemide (iDS) in December 2019. The transaction allowed an exit for theformer owner of the company and enabled the new owners of iDS (Mr. Üllar Jaaksoo and Mr. Marko Maalt) to further develop the business model and maintain a strong foothold in Estonia. BPM was the sole debt provider in the transaction. Legal advice to BPM was provided by the law firm Cobalt. Despite turbulent 2020, iDS continued its organic expansion and started to develop digital retail ecommerce solutions based on Magento and Woostore software, as clients increasingly prefer online stores to the ordinary stores.

As of now iDS develops POS software, provides technical support services, related hardware products and develops digital retail e-commerce solutions. The company is active across Estonia with a wide- and reputable client base which inludes Coop Estonia, Alexela, A1000 Market and R-Kiosk.

The CEO of iDS, Üllar Jaaksoo, commented that new reality, caused by the covid-19, has changed the landscape and future plans also for the retail industry. Acquisition of iDS was supported with mezzanine financing from BPM and took place in December 2019 just few months before the virus outbreak. iDS has recovered from the difficult period and has successfully launched a new business, vertically focusing on digital retail e-commerce solutions. iDS is well positioned to continue to serve its strong customer base and to add new business lines to it’s portfolio. Both, management and the investor of iDS are very satisfied with constructive and professional partnership with the BPM Capital team during last two challenging years.

“We would like to thank Üllar and his team for an excellent work and we are grateful for the opportunity to support the buy-out of iDS. iDS has a strong market position in Estonia and in addition a relatively stable nature of business was validated by iDS during challenging 2020 followed with significantly improved results in 2021” said Kalmer Kikas, Managing Partner of BPM Capital.

For further enquiries, please contact:

BPM Capital: Kalmer Kikas, tel: +372 605 0071, e-mail: kalmer.kikas@bpmcapital.eu
iD Süsteemide OÜ: Üllar Jaaksoo, tel: +372 550 5245, e-mail: ullar@ids.ee