Private equity investment firm INVL Baltic Sea Growth Fund has agreed to invest around €30m ($33.92m) in the cardboard business of Lithuania-based Grigeo, acquiring a stake of up to 49.99%.

Under the agreement, INVL’s subsidiary BSGF Salvus will acquire the stake in Grigeo Investiciju Valdymas in two phases.

BSGF will buy a 33.33% stake from Grigeo Investiciju Valdymas for €15m during the first phase covering Grigeo Group cardboard companies Grigeo Klaipeda, Grigeo Recycling, Grigeo Recycling in Latvia and Mena Pak in Ukraine, along with the shares of Grigeo Packaging.

The company will offer an additional investment of €15m to increase its stake in Grigeo’s cardboard business to 49.99%.

Grigeo president Gintautas Pangonis said: “Investor attraction marks a new stage in our development and actively supports our step-by-step approach to strengthening our position in the Baltic region.

“We are confident in the growing demand for cardboard and its products and therefore plan to increase our production capacity by three times over the next five years.

“This strategy also includes the investment of €150m in a new paper production plant of secondary raw material. We hope that the INVL Baltic Sea Growth Fund’s investment and team expertise will contribute to both the company’s growth and a stronger position in foreign markets.”

In addition, the company will finance the construction of the new facility using funds accumulated by Grigeo companies, along with investments of the fund and loans granted by financial institutions.

It is planning to establish the new paper mill in Lithuania or any other country where Grigeo’s subsidiaries operate. This project is expected to create up to 200 new jobs.

In January, Grigeo completed the sale of its corrugated cardboard production business to its wholly owned subsidiary UAB Grigeo Packaging.