Segezha Valuation Set To Spike As It Consolidates Russian Forest Products Sector

  • A deal between Segezha Group and Murat Aliev’s Bonum Capital will see the former expand its resource base by half again.
  • When the deal is concluded, Segezha is set to become Russia’s biggest player in the forest products sector. Valuation is set to double in the mid-term as the company catches up with global peers.
  • The post-pandemic macroeconomic environment seems favorable for Segezha’s business model, which includes high exports and self-sufficiency.

The past year has been a successful one for Russian IPOs. Shares of all the Russian companies which went public this year have grown since their floatation, with the sole exception of Fix Price. It’s unsurprising, then, that investors are keeping an especially close eye on the newcomers.

Segezha Group’s offering in April this year SGZH led to the first appearance of a forestry major on the Moscow bourse for a long time. Forests are as abundant as oil or gas in Russia, which is home to 20% of the world’s reserves of forests (although it currently accounts for a much smaller proportion of the global forest products market).


Segezha Group’s competitive advantages include low production costs, high-quality assets, and an effective management structure. Of particular importance for long-term strategic investors, though, is Segezha’s resource base. The company is making a particular effort to strengthen this area, announcing today that it acquired 100% of holding company Inter Forest Rus in a deal with investment group Bonum Capital. Inter Forest Rus is a Siberian company with extensive resources and manufacturing assets, valued at $515 million including debt, which comes to around $280 million. Separately, Bonum Capital is also increasing its stake in Segezha Group from 4.6% to around 13.3%, making it a significant partner and shareholder. Bonum Capital has a history in the forest products market, investing in assets and participating in Segezha Group’s IPO.

As a result of the deal, Segezha Group is set to become the largest sawn timber producer in Russia, and the second largest in Europe. It will also join the list of top 10 largest global players in the sector. Inter Forest Rus’ projected 2021 EBITDA is $152m, which, alongside Segezha’s projected 2021 total, makes a combined EBITDA of $539m. Their combined equity value will total $1,898m. The market is notable for its export potential as well as its ecological utility, which can be particularly attractive to ESG funds when managed correctly. Inter Forest Rus’ main export markets include China, Japan, the EU, and Egypt. 70% of Segezha’s products, meanwhile, are exported, with particular demand coming from industries such as construction, retail, and cement.