Poland continues to be a leading source of private equity business in emerging Europe, with recent transactions demonstrating the country’s attraction from both a retailing and manufacturing perspective.
Among the latest crop of deals, Warsaw private equity house Enterprise Investors bought a 60% controlling stake in Polish bathroom retailer and wholesaler Wema for €46 million.
"Our investment in Wema is a typical Enterprise Investors transaction in that we will become shareholders of the company alongside private entrepreneurs," says Agnieszka Kowalska, partner at Enterprise Investors. "The founders gave up control and kept a minority stake in the company as they feel confident that we have the experience and expertise to substantially support Wema’s countrywide expansion."
Founded in I989, Wema has grown from a small family business to Poland’s largest specialist bathroom retailer, with sales of €60 million in 2007. It operates through a network of 15 of its own and three franchised stores in northern and central Poland. Previous investments in the Polish retail sector by Enterprise Investors, which manages seven private equity funds totalling €1.7 billion, include supermarket chain Emperia, drugstore operator Apteki Polskie, flooring retailer Sklepy Komfort, fashion chain LPP and DIY operator Enterprise Nomi.
The well-developed Polish private equity market continues to attract new players, with IK Investment Partners of Sweden one of the latest examples. IK has acquired rail freight buffer manufacturer Axtone for a reported €100 million. Axtone was sold by global buyout firm Advent International, which formed the company from a merger between Poland’s Kamax and Germany’s Keystone Bahntechnik. Poland-headquartered Axtone employs 600 workers and expects turnover of more than €70 million this year. Commenting on the purchase of Axtone, Detlef Dinsel, managing partner at IK, responsible for Germany and central and eastern Europe, says: "We are looking forward to working jointly with Axtone management in further developing the company into a global leader for shock absorption technology for railways. Our intention is to apply IK’s successful buy-and-build strategy and to capitalize on growth opportunities as rail networks are expanded and modernized in many countries."
He adds that the Axtone transaction is IK’s first direct investment in the central and eastern European region and as such marks the start of the firm’s plans to invest directly in Poland, the Czech Republic, Slovakia, Hungary and the Baltic states, in addition to its existing operations in Benelux, France, Germany and Scandinavia. Founded in 1989, IK manages about €5.7 billion through four active funds.