East Capital exits ELKO computer wholesaler as sales go up

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East Capital, a private equity and venture capital firm with 3.8bn euros under management, has sold out of after helping the Riga-headquartered computer wholesaler to stabilise and boost its business.

East Capital has made a profit of 36% on its 8.8% interest in ELKO since it acquired the stake in 2005, according to a statement from the Stockholm-headquartered emerging markets-focused venture company with offices in Hong Kong, Kyiv, Moscow, Shanghai, Tallinn, Oslo and Paris.

The stake has gone over to other shareholders in ELKO, which has a dozen offices in Eastern European countries and former Soviet republics.

The statement credited East Capital with providing the IT company with growth capital and subsequently with “debt financing during the financial crisis in 2008 and 2009, when bank financing was limited”.

“Despite the unpleasant economic situation around the world, during the years of cooperation ELKO’s turnover has increased more than 1.5 times. We have doubled the number of products we offer, built a solid customer and vendor portfolio, further strengthening our leadership positions in the region,” said ELKO president Egons Mednis.

Gert Tiivas, head of East Capital’s private equity division for the Baltic states, called the Baltics “one of the one of the most attractive destinations for investment” and said the company had achieved positive results there “despite Latvia being the hardest hit country in the EU in terms of GDP contraction during the financial crisis”.

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