Porta Finance advises Eesti Energia on sale of network construction business
Eesti Energia and Leonhard Weiss Baltic Holding have signed an agreement Eesti Energiafor the sale of Eesti Energia’s network construction subsidiary to Leonhard Weiss. The transaction is in line with Eesti Energia’s strategy to focus on the oil shale industry, and the group will earn EUR 7 million from the sale of Võrguehitus shares.
The new owner of Eesti Energia Võrguehitus will be Leonhard Weiss Baltic Holding, a subsidiary of a large German engineering group Leonhard Weiss, which has been operating in Estonia in the field of railroad and road construction and maintenance since 2011.
“It makes sense for Eesti Energia to divest non-core operations as we are focusing more on the development of the oil shale industry,” Sandor Liive, Chairman of the Management Board of Eesti Energia, explains the background of the transaction. “Võrguehitus, on the other hand, needs an owner whose main business is design and construction of networks. We managed to find such a new owner, which is why we hope that the company’s future development prospects are good.”
According to Alexander Schneider, Chairman of the Management Board of Leonhard Weiss Baltic Holding, it is an important transaction. “It is a very important step in the strategic development of the Baltic branch of Leonhard Weiss group. Võrguehitus is a third company in addition to Leonhard Weiss RTE and Leonhard Weiss Viater Ehitus for us in the Baltics, and we expect good synergies and long-term development for our operations in the region,” Schneider explained. He added that Võrguehitus, which will be renamed to Leonhard Weiss Energy, can use Leonhard Weiss’ existing network in the Baltic and Scandinavian countries for developing and expanding its business further.
For the majority of Võrguehitus’ nearly 300 employees, the new owner will not bring about any major changes. Employment contracts are transferred to the new owner as they are, as the company is being sold as a whole.
“The team of Võrguehitus is comprised of the best specialists in their respective fields, and they are the only ones able to provide full solutions, in such a large scope, in the field of electrical works. I believe that the experience gained on the competitive procurement market over the past few years will help to ensure the success of the company in the future,” Liive added.
Eesti Energia Võrguehitus provides both turn-key solutions as well as single projects for the construction and maintenance of electrical and communication networks, from design to construction and maintenance services. 269 employees work in the company.
Leonhard Weiss Baltic Holding is a Baltic branch of a German family business founded in 1900. Since 2011, it has been operating in Estonia in the field of railroad construction and maintenance, while also providing a full range of construction services in its homeland. There are 3,833 employees working in the group, of whom 250 are located in Estonia.
The completion of the transaction is subject to conditions, including approval by the Estonian Competition Authority. Eesti Energia’s financial advisor for the transaction was Porta Finance and legal advisor Sorainen.
Further information:
Karl-Erik Kodu
Director, Porta Finance
Tel: +372 602 5015
karlerik.kodu@portafinance.com
