BaltCap, the largest private equity fund manager in the Baltics and investment company Draugiem Capital invest in Latvia based multi-sector production company SIA Pepi Rer to boost the global expansion of the business. Pepi Rer is widely known for its soft play brand IGLU, floor insulation brand ProVent, as well as the production of construction and packaging materials. After the transaction BaltCap and Draugiem Capital will become the majority shareholders of the company.
Founded in 1998 and based in Valka, Latvia, Pepi Rer is a manufacturing and e-commerce company producing a wide range of polyethylene foam and air bubble film products. The D2C exporter of branded kids soft-play toys IGLU and packaging and construction materials exports 90% of its sales to more than 40 countries all over the world. After the introduction of the IGLU brand in 2015 the company has more than doubled its revenue reaching a turnover of €13.5 million and profit of €1.7 million in 2022. The company employs 200 people.
The co-founder and co-owner of Pepi Rer, Viesturs Lucāns comments: “The greatest asset of our company is the people who work here, many of whom have been with us since day one. This is the reason why we chose our investment partners carefully. We received many offers, but the teams at BaltCap and Draugiem Group created confidence in us. I trust their knowledge and experience in backing local companies on their growth journey, and their help in reaching new heights, so Pepi Rer can introduce innovative technologies and enter new markets".
Draugiem Capital investment director Dāvis Siksnāns shared the growth plans: "We see great potential to develop the IGLU brand by expanding sales both on platforms such as Amazon and the company's website, using our 19 years of knowledge from companies such as Printful, Fast Brands and others".
“Pepi Rer's success has been achieved with dedication and persistent work of the company's founders, management team and employees. We deeply appreciate their contribution and see a great opportunity to continue this growth story. Our ambition is to make the company a leading player in its niche in the USA and other export markets, using BaltCap's 25 years of experience in taking more than 100 local companies to the international level," says BaltCap investment director Sandra Aile.
After the completion of the transaction, a new supervisory board will be formed with BaltCap investment directors Sandra Aile and Pēteris Treimanis, as well as Draugiem Capital investment director Dāvis Siksnāns serving as board members.
The acquisition of Pepi Rer is the second joint investment of BaltCap and Draugiem Group. In 2012 BaltCap invested €0.5 million in Draugiem Group company Vendon. After joint development, the company was acquired in 2022 by Spain's most prominent international technology company Azkoyen. Without up to €4.0 million earnout part, the Vendon deal size reached €9.3 million.