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 exited its investment in a world class B2B IT procurement solution provider Markit

BPM Mezzanine Fund SICAV-SIF, SCA (BPM) provided financing for the management buy-out transaction in March 2016. The transaction enabled the management team led by Andres Agasild to re-acquire majority ownership in the Company. BPM was the sole debt provider in the transaction.

During the investment period Markit has shown remarkable growth in many aspects of its activities:

  • Revenues increased from 68 mEUR to 174 mEUR (estimated 2021)
  • EBITDA grew from 825 thEUR in 2015 to 5.5 mEUR today
  • The number of employees increased from 88 to 145
  • Markit is today operating in 38 countries (28 in 2015) in Europe, North America, South America and Asia Pacific’s
  • The Company’s IT product marketplace and procurement solution includes live feed from more than 325 key distributors

Markit clients include over 20% of the Global Forbes 2000 and Fortune 500 companies. Companies such as ABB, AGA (Linde AG), Coca-Cola, Danfoss, Ericsson, Johnson & Johnson, MetLife, Rezidor/Radisson, Roche, Sanofi, Schott, SEB, Siemens, Skype, Wise, Telenor, Tieto, TIKTOK and many more are solving numerous indirect IT purchasing issues with Markit.

The CEO of Markit, Andres Agasild, commented that “The co-operation with BPM has been excellent. They have been very supporting, flexible and it is a great team to work with. Their financing helped to support strong results for Markit and to create a mutual success story.”

“We would like to thank Andres and his team for the outstanding performance, and we appreciate highly the opportunity of being part of this transaction. Markit has a strong market position both in the Baltics and also globally, all while experiencing fast growth. We are certain that the growth story of Markit continues” said Priit Veering, Partner at BPM Capital.

For further enquiries, please contact:

BPM Capital: Priit Veering, tel: +372 605 0074, e-mail: priit.veering@bpmcapital.eu
Markit: Andres Agasild, tel: +372 506 5189, e-mail: andres.agasild@markit.eu