Avallon MBO invests in Letniskowo

Source: https://avallon.pl/

June 6, 2023

The private equity fund Avallon MBO has acquired a 70% stake in Letniskowo as part of Avallon MBO Fund III. Letniskowo has been developing projects for modern, year-round mobile homes for 10 years. It is currently already selling more than 500 such houses per year, the more or less 80 per cent of which are exported primarily to different European countries. In 2022, Letniskowo had sales totalling PLN 115 million, and is forecasting double-digit growth for the current year.

The acquired company originates from Bialystok, where, on the area of 4.5 ha, it has, among other things, a hall with a production line, already capable of producing up to 800 homes a year, ready to be occupied immediately. The company employs over 170 people. In 2022, almost 30 per cent of Letniskowo’s customers were private clients and 70 per cent were commercial ones (e.g. distrybutors, companies erecting homes for temporary workers or investors offering homes for recreational rental). In 2019, premium segment homes by JB Homes were included in the Letniskowo portfolio.

– This is a new but promising market segment for us in terms of investment. We are witnessing a growing interest in this type of housing all over Europe, which is the result, among other things, of significant changes in preferences among Europeans when it comes to leisure activities and trends in tourism. They are increasingly inclined to spend their leisure time locally, relatively close to where they live and to nature. At the same time, many people are already demanding a higher standard than that offered by typical holiday or camping chalets – says Marcin Brodziak, investment manager at Avallon MBO, responsible for the transaction.

– Importantly, the homes offered by Letniskowo are year-round, which in turn fills a gap among people who want to build their own comfortable and modern houses, which can be as large as 60 square metres, purchased at a lower cost and without needing to comply with restrictive building requirements. It is also an interesting alternative to houses built in a traditional way, as it gives certainty about the investment costs incurred – they are agreed in advance and remain fixed. Therefore they are not susceptible to, for example, fluctuations in the prices of construction and finishing materials or labour costs – adds Marcin Stamirowski, the fund’s investment director.

According to analyses, the mobile home market in Europe is growing organically by around 6 per cent per year, and during the pandemic it recorded growth rates of up to 15 per cent year-on-year . However, the new Avallon company, today the leader of the segment in the Polish market, basing on the growth of its significant sales abroad, sees great chances to further increase the scale of its business. The company is already present across the entire CEE region, as well as in the Benelux countries, France, Scandinavia and Germany – where the popularity of mobile homes is the greatest (accounting for approximately 25 per cent of the whole European market).

– An important factor for our customers is the relatively low cost of erecting such a home, while maintaining a high standard and energy-efficient solutions. As it is a mobile home, it is subject to different, less restrictive building regulations, which significantly reduces bureaucratic formalities, like for example those related to building supervision. On top of this, we offer a very broad catalogue, both of the homes themselves and of their equipment solutions. We also facilitate extensive personalisation of such a home, depending on individual preferences. All this makes it a simpler and more attractive alternative to both holiday homes and year-round houses – explains Marek Wasiuk, CEO of Letniskowo, and adds – No less important is also the fact that such a house is manufactured, ready to live in after just two months from its order.

The fund’s entry means, above all, strategic support for the company, with particular regard to Avallon’s role as a financial investor, providing the capital base necessary for its further development – whether in terms of expanding its offer, e.g. with modular houses built using a related technology, or increasing its presence on foreign markets, where the company wants to make its name even more prominent.

Apart from Letniskowo, the Avallon fund’s portfolios include eight other companies: Wosana and Hortimex – from the food industry, the marketing company EDC Expert, the shopping platform Marketplanet, TES – a manufacturer of machinery and electrical components used in

the energy industry, Clovin – a company producing cleaning products, a manufacturer of high-quality lighting equipment and aluminium castings – Norlys, and Globema, a provider of geospatial software. In parallel, Avallon is actively seeking further investments. The Avallon MBO III fund has raised EUR 137 million for this purpose.