Value building
through M&A
and acceleration
of Enterprises

Providing M&A and buy-out transactions in Real Economy sector we simultaneously implement groundbreaking growth programms for scale-up and enterprise value acceleration.

Strategy and DNA 01.

Investment model

Averton Sterling is a transformation and investment boutique which provides financial capital and advisory methodology to build value of operating companies and properties in 3 models:

Restructuring management, optimization, development and value building of enterprises.
Financial and consultancy capital in investment rounds for business scaling (phase III to M&A).
Partnership in mediation between the enterprises, shareholders and creditors (banks).

Portfolio

_ Recycling & Renewable Energy

One of the strongest responses to the pace of changes in the relationships between energy consumers and the natural environment.

Mergers, Acquisitions, Restructuring
Real estate, Receivables, Secured assets
Scaling & Growth

_ Industry 4.0

Intelligent conjunctions of cyber-physical systems of production and mobility of objects and data transmission.

Mergers, Acquisitions, Restructuring
Scaling & Growth

_ Production

Real economy, packaging, mass production and specialized industry.

Mergers, Acquisitions, Restructuring
Real estate, Receivables, Secured assets
Scaling & Growth

_ Rigid polymer packaging sector

Sector consolidation, M&A transactions, mergers and acquisitions, restructuring and development.

Mergers, Acquisitions, Restructuring
Scaling & Growth

Expertise

Audit and Due Diligence Remodeling Strategic consulting Investment strategy Financing and capital Management support Building value M&A

Consultancy

Venture Capital

Private Equity

Investment Bank

Public subsidies

Averton Sterling

Diversification 02.

Selection of targets and proven business remodeling methodology allow for execution of investments resulting in above-standard ROE.

The diversification of investments is guaranteed by the Statutes and the Regulations of Averton Sterling and confirmed by an entry in the Register of Alternative Investment Companies regulated in Poland by Polish Financial Supervision Authority (UKNF).

Restructuring

Mergers

Acquisitions

Development

Venture

Scaling

Properties

Receivables

Secured assets

03. Management

Jarosław Wywiał, Msc

Executive Advisor / Operations

With his experience in project management and optimization of production processes, Jarosław helps to ensure that investment operations are efficient. His expertise in assessing production capabilities and expanding facilities are useful in project’s efforts to scale and expand.

Additionally, his experience working with international companies in industrial sector provide insight into best practices and trends.

Jakub Niestrój, Ph.D.

Chief Executive Officer

Extensive experience in the field of restructuring, investments and project management for large enterprises and SME sector, start-ups, State Treasury companies and public administration. Supervision over the implementation of projects > € 100M.

In 2015-2018, shareholder and board member of the Alteverso Group companies. Responsible for the implementation of priority projects in several dozen enterprises, as well as for obtaining financing and building a professional network in the region of CEE and Western Europe.

In the past an expert at WYG International – a company of the British WYG Group, listed on the London Stock Exchange, specialized in economic and engineering consulting and Senior Consultant at Simon Kucher & Partners – a leading pricing and sales management consultancy.

Investor and member of supervisory boards of diverse advisory and investment companies. Co-owner in leading Polish equity crowdfunding platform.

In 2012 awarded the academic PhD title in the field of Economics.

Mateusz Mazur L.C.

Board Member / M&A

For several years associated with the investment and financial market. Initially operating in the legal industry, then in the corporate and private debt and finance sector.

Board Member and supervisory boards member of significant capital groups (Navi Group SA, GRIN SA).

Passionately involved in design and implementation of ambitious capital projects with a unit value of several hundred million Euro.

An expert on the debt trading market and the industrial waste-management sector implemented in the circullar-economy and zero-waste models.

Legal advisor with extensive transaction experience. He participated in the largest Polish projects carried out in the ESCO and PFC formula, in which he implemented securitization solutions. He cooperated with capital market institutions, responsible e.g. for asset-management ventures. He has restructured enterprises in the trade and sales sector and manufacturing industries.

He specializes in the field of effective structural and financial transformation, combining the ability to rebuild the value of enterprises in the process of change, as well as those at risk of bankruptcy or liquidation.

Q&A 04.

Enterprises

What is the model of cooperation between Averton and Enterprise?

Averton carries out the due diligence, then terms of the investment agreement are defined, as well as volume of capital commitment, goals to be achieved and disinvestment parameters.

Averton, in close cooperation with the Management Board and the Owner of the Company, designs and then implements the programs incl. restructuring, optimization of the business model and development investments in order to increase the value of Enterprise.

The model of cooperation with is characterized by 3 elements:

01. Direct capital commitment and strategic management support.

02. Orientation to strategic goals and building enterprise value.

03. Exit conditions dependent on restructuring efficiency indicators.

What is the process of qualifying the Company for investment?

The investment policy provides a 2-level verification of the investment. A positive result of the validation of the first level requires an analysis of legal and financial compliance. The second level requires a positive test of 4 out of 6 investment criteria:

01. Real economy enterprises and secured assets

02. A committed and determined management team

03. ROI perspective in 36-60 months

04. Scalable business model

05. Consent to optimize structures, processes and business model

06. Exit terms pre-defined in the Investment Agreement

In order to submit a project please send an application with teaser pitch-deck to: operations@averton-sterling.com

What is the difference between Averton Sterling and other entities operating on the investment market?

Averton Sterling builds a competitive advantage at the interface between expertise of investment fund, consulting company and interim management for venture projects and companies undergoing dynamic distressed or growth change.

As an independent capital and advisory partner, it offers cooperation in restructuring or optimization to selected enterprises in a way that is unique on the market, combining 3 priorities of cooperation with the Enterprise.

01. Direct capital commitment and strategic management support

02. Orientation on goals and building enterprise value

03. Exit parameters depend on the output KPI of restructuring.

In what sectors of the economy does Averton invest?

Averton implements investment objectives in real economy sector of the economy via 3 investment models.

The sectors:

01. Real Estate

02. Mass production

03. Renewable energy & recycling

04. Packaging

05. Secured assets, including receivables

06. Industry 4.0

Investment models:

01. Restructuring, mergers and acquisitions

02. Business development, venture and scaling

03. Real estate, receivables and secured assets

What are the capital sources?

Averton is supplied domestic ans foreign private capital.

In what form is the investment conducted?

01. Equity instruments

02. Debt instruments (corporate debt)

03. Mezzanine instruments

What are the key priorities of the investment strategy?

Averton defined three unique elements, allowing for significant leverage of efficiency in building net value assets, multiplying profits in 3 models:

01. Scaling to M&A. Readiness to provide financial and substantive capital in investment rounds for business scaling (phase III to M&A)

02. Interim strategic management. Involvement in restructuring management, optimization, development and value building of portfolio enterprises.

03. Mediation and capital partnership. Fund partnership in the mediation and capital model between the enterprise, shareholders and creditors (i.e. bank).

What is an investment horizon for private investor?

From the Investor’s perspective: 36 – 60 months in “pure equity” investment programs and 24 – 36 months in in “corporate debt” investment programs.

What are the benefits for the enterprise from cooperation with Averton?

The main benefit for the Enterprise is to stop the negative trends caused by the decrease in financial liquidity, business model modification, transferring know-how in the area of business scaling and rebuilding value of the company’s valuation.

Does Averton have a controlling equity stake in the company's share structure?

Taking over a controlling stake of shares or stocks is the priority for Averton involvement.

Under what conditions is de-investment of Averton performed?

The investment policy assume the ability of the Parties to define the conditions of exit at the stage of the Investment Agreement (IA). The investment agreement defines an algorithm that allows the calculation of Averton disinvestment parameters depending on the KPI values defined in the UI. Disinvestment models are:

01. IPO (stock exchange debut)

02. MBO

03. Put Option at pre-defined IRR

04. M&A by the Strategic Investor at pre-defined IRR + premium for company valuation increase at Transaction.

In what sectors of the economy does Averton invest?

Averton implements investment objectives in real economy sector via 3 investment models.

Sectors:

01. Real Estate

02. Mass production

03. Renewable energy and recycling

04. Packaging

05. Secured assets – incl. receivables

06. Industry 4.0

Investment models:

01. Restructuring, mergers and acquisitions

02. Business development, venture and scaling

03. Real estate, receivables and secured assets

What parameters should the Enterprise meet in order to cooperate with Averton?

The investment policy provides a 2-level verification of the investment decision process. A positive result of the validation of the first level requires an analysis of legal and financial compliance. The second level requires a positive test of 4 out of 6 investment criteria:

01. Real economy enterprises and secured assets

02. A committed and determined management team

03. ROI perspective in 36 – 60 months

04. Scalable business model

05. Consent to optimize structures, processes and business model

06. Exit terms pre-defined in Investment Agreement

In order to submit a project please send teaser and pitch deck to: operations@averton-sterling.com

What is the typical investment cycle time?

Investments are carried out in 3 time horizons:

01. Short term projects (12 months)

02. Mid-term development projects (18-36 months)

03. Strategic projects (36-60 months)

What are the capital sources?

Averton is supplied with domestic and foreign private capital.

Reports 05.

New

The challenges of the investment market in Poland - restructuring, consolidation, MBO, succession

Global measures often do not reveal important processes and trends taking place at the mesoeconomic level. A maturing economy requires from developing enterprises more and more productivity and economic efficiency.

Lower-value debit including the value of non-performing loans (NPL), is growing regularly in Polish enterprises. In the SME sector in 2017-2019, this increase was as much as 28% and amounts to PLN 27 billion. This phenomenon was accompanied by a regular increase in the number of bankruptcy and restructuring proceedings. In 2019, 1019 proceedings were pending in Poland (15% more than two years earlier). Experience shows that Polish restructuring is not associated with business remodeling, and most often takes place in the mode of minimizing creditors losses in the face of bankruptcy. This phenomenon is a systemic gap in Poland and results from the low confidence of market participants in tripartite solutions, as well as from the low popularization of distressed & insolvency funds.

New

SARS CoV-2 as a delayed-action cumulative recession factor

Epidemia wywołana wirusem SARS CoV-2 w istotny sposób wpływa na realia gospodarcze i społeczne. Na skutek pandemii, nastąpiły znaczące zakłócenia w funkcjonowaniu biznesu, szczególnie w sektorze MŚP.

The SARS CoV-2 virus epidemic significantly affects the economic and social realities. As a result of the pandemic, there have been significant disruptions in the functioning of business, especially in the SME sector. The diagnosis of recessionary phenomena directly and indirectly influencing the realities of the functioning of Polish enterprises allows us to conclude that, similarly to the crisis in 2008-2012, now it will also be necessary to implement recovery programs in many enterprises most affected by the negative effects of the epidemic. Economic disruptions caused by the epidemic, causing a significant decline in economic activity, include:

demand regress as a result of a decrease in consumption
decline in corporate revenues and individual consumers` income
instability in financial markets, including inflation, falling asset prices, rising commodity prices, weakening exchange rates and deteriorating liquidity
turbulence related to the disruption of supply chains
limited availability of investment, working capital and consumer loans
deterioration of the general condition of enterprises and decline in consumption moods.

It is estimated that the financial gap in the enterprise sector in Poland related to the negative impact of the pandemic amounts to PLN 220 billion, which constitutes approx. 10% of Poland`s GDP, of which PLN 117 billion is the financial gap in the SME sector.

New

The challenges of the investment market in Poland – venture

Alone in 2019, the amount invested in Polish venture enterprises equaled to the total investments of the previous 10 years. In terms of the share of venture investments in the GDP value, in 2019 Poland advanced from the 21st place in Europe (0.006%, 2018) to the 10th, thus equating the level of expenditure with the European average (0.05%).

Admittedly, the dynamics of the increase in expenditure on innovation in Poland is impressive, however, the specific capital structure (financing sources, typology of investment targets and the average transaction value) is remarkable. Polish early development entrepreneurship (seed phase and start-up phase) is largely financed by Polish capital (95% of transactions), 88% of which financed from public funds. In Poland, there is a significant, unused potential for private capital (foreign and Polish), professionally aggregated, managed and invested in the smart-money model. A greater symmetry is needed between the source and weight of capital – public and private, domestic and foreign – invested in the Polish venture sector. There two main reasons for: private capital creates the company`s financing ecosystem in subsequent stages of development, and foreign capital increases the chances of international commercialization of projects.

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Contact us 06.

Warsaw

ul. Poznańska 37
00-689 Warsaw, Poland

operations@averton-sterling.com

London

63-66 Hatton Garden
London, EC1N 8LE
United Kingdom

+44 203 930 16 52
operations@averton-sterling.com

Strategy and DNA