ARX Equity Partners acquires Promens Zlin, Tier 1 system and development supplier of large plastic components for utility vehicles

ARX Equity Partners has agreed to complete the acquisition of Promens Zlin.

ARX is acquiring the company from Berry Global (NYSE: BERY) with deal completion being subject to customary closing conditions. As part of the investment, ARX has agreed to partner with the company´s existing management team, who will continue to lead its future growth and development.

Promens Zlin (headquartered in Zlin, Czech Republic) is a Tier 1 system and development supplier, focused predominantly on large vehicle exterior and interior parts, which are key components in the production of buses, earth moving vehicles and agriculture equipment. Promens Zlin possesses exceptional R&D capability, especially in the important areas of reaction injection molding and vacuum forming. The company is currently undergoing a substantial capital expenditure programme to both expand and modernise its production facility, in order to meet growing demand from its customer base. In fiscal year ending 2020, Promens Zlin generated sales of ~€ 37 million.

Mid Europa invests in the leading Baltics e-commerce platform

Mid Europa Partners (“Mid Europa”) announced today that it has entered into a definitive agreement with MCI.Techventures and minority shareholders of UAB Pigu (“Pigu”) to acquire 100% shareholding in the company. Additionally, Mid Europa has agreed with MCI.Euroventures and the founding shareholders of Pigu and Hobby Hall Group OÜ (“HHG”) to combine Pigu and HHG. The combination will result in the creation of the leading e-commerce and online marketplace platform operating across Lithuania, Latvia, and Estonia with a growing presence in Finland (the “Group”).

Mid Europa will emerge as the majority shareholder supported by MCI.Euroventures (MCI buyout fund) and the two founding shareholders of Pigu and HHG retaining significant stakes in the combined Group. The transaction, which is subject to antitrust approval, is expected to complete in Q2 2021.

With several million registered customers across four countries, over 2,000 merchants onboarded on Pigu’s proprietary marketplace platform over the last year, as well as a unique portfolio of online shopping destinations such as pigu.lt, kaup24.ee, hansapost.ee, 220.lv, xnet.lv, and hobbyhall.fi, the combined Group is expected to lead the development of the region’s rapidly growing digital economy by offering the best-in-class value proposition and online shopping experience for its customers and merchants alike.

Kerim Turkmen, Partner of Mid Europa, said: “The acquisition of Pigu and HHG demonstrates Mid Europa’s continued focus on supporting established e-commerce leaders in the CEE region, such as Allegro, the major e-commerce platform in Poland. We are excited to team up with Dainius, Taavi and our co-shareholder MCI, as the combined Group follows a similar path of accelerating investment into innovation and customer experience. We believe the combination of Pigu and HHG will mark a new chapter in the development of e-commerce in the Baltic region.”

Rustam Kurmakaev, Principal of Mid Europa, added: “The rapid growth of Pigu and HHG is a testament to what the vision and hard work of ambitious entrepreneurs can achieve. We believe that now is the right time for these two exceptional companies to join forces and we look forward to supporting the combined Group during the years ahead.”

Dainius Liulys, Co-Founder and CEO of Pigu, who will serve as CEO of the combined Group, said: “The combination of Pigu and HHG creates a true regional champion and represents a unique opportunity for us to accelerate e-commerce growth in the Baltics and Finland. We are putting together two incredibly talented teams and expect to leverage our joint fulfilment and technology infrastructure as well as highly complementary product selection to further improve the online shopping experience for our customers. I am delighted to welcome Mid Europa as an experienced and strong partner and look forward to working with them to lead the combined Group through its next phase of growth.”

Taavi Rajur, Co-Founder and CEO of HHG, said: “We are very excited about joining forces with Pigu as we share a common mission of constantly improving the value and convenience of online shopping for our customers. I am also pleased to welcome Mid Europa and look forward to working with them and Pigu on building a world class online marketplace in our region.”

The transaction was executed by Rustam Kurmakaev, Aleksandar Dragicevic, Dragos Ardelean and Bogdan Bunea.

Mid Europa was advised by Porta Finance (M&A), Dechert and Cobalt (legal), OC&C (commercial), Palladium Digital (technology), and EY (financial & tax).

Mid Europa Partners LLP is registered in England, company number OC310725. Its principal place of business and registered address is 120 Regent Street, London W1B 5FE. Mid Europa Partners LLP is authorised and regulated by the Financial Conduct Authority. It is included in the FCA register and its registration number is 425836.

This e-mail message including any attachments, is confidential and may be privileged or otherwise protected from disclosure. If you are not the intended recipient, any use, dissemination, distribution, copying or disclosure of this e-mail message and any attachments is strictly prohibited. If you have received this message in error, please immediately notify the sender and delete this e-mail message from your computer. The information contained in this e-mail message does not constitute distribution, an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

ARX Equity Partners acquires Instrumentation Technologies, a global leader in advanced instrumentation for the particle accelerator and proton therapy markets

ARX Equity Partners (“ARX”) has agreed to complete the acquisition of Instrumentation Technologies (“I-Tech”, www.i-tech.si). Founded in 1998 and headquartered in Solkan, Slovenia, I-Tech is the global market leader in the development and assembly of high-specification instrumentation for data acquisition and signal processing used in scientific particle accelerators. Also core to the I-Tech strategy is utilizing the company’s know-how and R&D capabilities to develop instrumentation for medical proton therapy applications as well as broader industrial markets.

The transaction also includes Red Pitaya (www.redpitaya.com), a handheld electronics lab incorporating instruments such as oscilloscopes and signal generators and which is seeing widespread adoption among signal processing engineers, hobbyists and students.

ARX acquired the company from its founders and financial details of the transaction were not disclosed. Completion of the transaction is subject to customary closing conditions. As part of the transaction, ARX agreed to partner with the company´s existing management team who will lead the future growth and development of the Company.

Genesis Growth Equity Fund I reached its hard cap size of € 40 million.

Genesis Growth Equity Fund I (GGEF I), a fund focusing on smaller and mid-size high growth potential companies primarily in the Czech and Slovak markets, reached its hard cap size of € 40 million following the final closing of the Fund in December 2020 with additional commitments from SPM Capital and Sirius Investments.

“We are pleased to announce completion of the fundraising of Genesis Growth Equity Fund I with a final close reaching € 40 million thanks to support of number of reputable institutional LPs. The Fund was despite current challenging market conditions oversubscribed with the investor commitments reaching the hard cap amount.” comments on the successful fundraising of GGEF I Jiří Beneš, Managing Partner at Genesis Capital Growth.

“Regardless of last year being quite a difficult period for M&A transactions, we managed to close the first investments of GGEF I into two well-performing companies – R2B2 and Home Care Promedica. We look forward to deploying the Fund in the coming years as we see a number of high-growth potential businesses. These often face the issue of succession to the founders but are capable of using development capital efficiently.” added Radim Jasek, Partner at Genesis Capital Growth.

Genesis Growth Equity Fund I will invest equity tickets of up to € 4 million into established companies with a significant growth potential mainly in the Czech Republic and Slovakia, which plan on expanding their operations, grow internationally or invest into innovations. The GGEF I team sees a large number of exciting opportunities in this market segment and will provide entrepreneurs and companies with additional capital and support to back their business expansion.

During 2020 the Fund already completed its first two investments when it acquired majority stakes in R2B2, a leading provider of programmatic advertising services in the Czech Republic, and Home Care Promedica, an established provider of professional home health care services mainly in the Prague area.

0100 Virtual CEE_The 2nd Edition of PE & VC Virtual Conference in the CEE Region 16-18/3/2021

0100 Conferences are pleased to invite you to the 2nd edition of their Private Equity & Venture Capital virtual conference in the CEE region- 0100 Virtual CEE scheduled for 16-18 March 2021. You can look forward to more than 500 industry professionals including 300+ investors interested in the CEE region. 

You will have a chance to get insights from speakers like: 

•Tomasz Ciborowski, Partner at Enterprise Investors 

•Rustam Kurmakaev, Principal at Mid Europa Partners 

•Paweł Czupryna, Head of Fundraising at Mount TFI 

•Andrzej Bartos, Senior Partner at Innova Capital 

•Brian Wardrop, Managing Partner at ARX Equity Partners 

•Jan Brávek, COO at Jet Investment 

•Michal Rybovič, Partner at Sandberg Capital 

•Michal Tománek, Investment Director at KKCG Group 

•Ondrej Bartoš, Partner at Credo Ventures 

•Kinga Stanisławska, General Partner & Founder at Experior Venture Fund 

•Andris K. Berzins, Managing Partner at Change Ventures 

•Stephane Gantchev, Partner at LAUNCHub Ventures 

•Piotr Sliwa, Investment Director at 3TS Capital Partners 

•Marcin Szeląg, Partner at Innovation Nest 

•Tomas Kemtys, Partner at Contrarian Ventures 

•Evgeny Angelov, Managing Partner at Silverline Capital 

•Maximilian Schausberger, Managing Director at Elevator Ventures 

•Venelin Dimitrov, Partner & Co-Head of the M&A practice at Tsvetkova Bebov Komarevski 

•Barbara Nowakowska, Managing Director at PSIK 

and others. 


Panel discussions cover topics such as Fundraising appetite in the Region, LP perspective on opportunities & new market trends, PE firms dealing with post pandemic situation, VC investing in the region and many more. 

Are you a Limited Partner or General Partner? 

Then you can register with a complimentary ticket HERE

 

Enterprise Investors increases its stake in Anwim

Polish Enterprise Fund VIII, a private equity fund managed by Enterprise Investors (EI), will become the majority shareholder of Anwim, Poland’s largest independent operator of petrol stations trading under the MOYA brand. The company is also involved in fuel wholesale. Increasing EI’s involvement requires anti-monopoly approval.

 

Anwim was founded in 1992 by two entrepreneurs and initially it dealt solely with the wholesale of fuels. In 2009 the company launched retail operations under the MOYA brand and created an independent nationwide chain of petrol stations. Anwim is present in all Poland’s voivodeships, with outlets along the main transit routes and local roads as well as in towns and cities. In addition to petrol sales, the chain’s broad offer includes well-stocked mini stores, Caffe MOYA outlets selling food and coffee, car wash facilities and tailored services for business clients. MOYA leads the Polish market in terms of growth dynamics.

 

Enterprise Investors entered Anwim in 2018, when it had 180 petrol stations. Only in the first three quarters of this year the chain expanded by another 29 stations, and it is set to number c. 310 by the end of 2020. Last year, Anwim’s revenues amounted to EUR 900 million.

 

We are very pleased that Mr. Witold Butkiewicz, Anwim’s founder, will remain a significant shareholder and chairman of the supervisory board. The last two years are irrefutable proof of how much can be achieved through harmonious cooperation between an entrepreneur and a private equity fund,” said Sebastian Król, partner at Enterprise Investors responsible for the investment.

 

Live panel discussion| Impact Investing: New businesses for the future

CVCA and Deloitte cordially invite you to join a live panel discussion Impact Investing: New businesses for the future. We will focus on investing in projects which are financially sustainable and, in the same time, have positive social or environmental impact.

When: 4/12/2020.    2 p.m.

Panelists

Silke Horák, Co-founder & Partner, Tilia Impact Ventures,
Cyril Gouiffès, Head of Social Impact Investments, EIF
Philip Staehelin, Founder & CEO, DOT Glasses
Petr Báča, Founder & CEO, MIWA

Moderators

Zuzana Picková, CEO, CVCA
Dušan Ševc, Partner, Financial Advisory, Deloitte

Live stream here:

https://akce.deloitte.cz/watch/?m=M7KpdQJPXdo

Live panel discussion| Impact Investing: New businesses for the future

CVCA and Deloitte broadcast a webcast on Impact Investing: New businesses for the future on 4.12. 2020. The practical experience with a business with a positive social or environmental impact, that this business is not philanthropy, but on the contrary must also be economically sustainable, was discussed by:

Panelists

Silke Horák, Co-founder & Partner, Tilia Impact Ventures,
Cyril Gouiffès, Head of Social Impact Investments, EIF
Philip Staehelin, Founder & CEO, DOT Glasses
Petr Báča, Founder & CEO, MIWA

Moderators

Zuzana Picková, CEO, CVCA
Dušan Ševc, Partner, Financial Advisory, Deloitte

You can watch the webcast recording here:

 

Abolishment of share sales income exemption to affect PE&VC transactions

Representatives of private equity and venture capital funds perceive very negatively the proposal of Deputy of the Parliament Mikuláš Ferjenčík to abolish the exemption from taxation of income from the sale of securities exceeding 20 million CZK. There is significant concern among investors about unrealistic price expectations of sellers, as they may be forced to account for the increased tax burden within them.

According to the adopted (non-governmental) amendment, the exemption of an individual’s income from the sale of a security (including the master certificate), resp. income from the share attributable to the investment certificate upon cancellation of the share fund, should be newly limited to the amount of 20 million CZK per taxable period. With regard to the absence of a special transitional provision, it is therefore possible that income from the sale of securities paid to an individual in 2021 will already be subject to a new taxation regime, even though the underlying securities were acquired by the end of 2020. Moreover, the proposed change would also affect the already closed transactions, as a substantial part of them has a so-called deferred purchase price payment depending on future economic results in a few years after the sale.

The CVCA very negatively assesses the fact that the proposal was neither discussed with the business experts, nor is in conflict with the proposals for capital market development resulting from the National Strategy for Capital Market Development, which had been approved last year. Furthermore, the proposal did not obtain a recommendation of the Budget Committee of the Chamber of Deputies of the Parliament of the Czech Republic. The preservation of the time test had also been recommended by the World Bank Report on the Development of the Capital Market in the Czech Republic, which the National Strategy has drawn upon.

At the same time, the members of the CVCA are afraid of interpretive ambiguities and potential risks when structuring transactions, as well as of the short time between the presumed approval and the real effectiveness. “Any random and non-systemic taxation amendment brings major problems for the funds. The CVCA has long been calling for the predictability of the tax environment, and this proposal is in sharp contrast to this requirement. The objective of the governmental policy should be to support the financial sector, which works with high added value and supports Czech growth and innovative companies, not its destabilisation” says Jiří Beneš, CVCA President, in his comment about the proposal.

Private equity funds are increasingly buying companies from their founders and, thereby, help them resolve the problem of succession. Such companies have been run by individuals / families for decades and they, in good faith, presumed that the yield from selling their businesses would be generally exempt of tax. The limit of 20 million is very low in this context. Only small companies are purchased within this price range, which are currently targeted by only a minimum of private equity funds. The proposed changes would have a considerably negative impact on the structuring of transactions and on purchase prices. At the same time, these family businesses are by nature businesses with a high added value

and have significant potential for further growth in the future. Besides this, sellers – shareholders would be entirely unjustifiably disadvantaged as opposed to sellers – associates of private limited companies, or other types of companies which do not issue their shares in the form of securities. It is this aspect where it is possible to see another inconceivability of the entire amendment concerning these incomes. Moreover, the wording of the amendment in question raises a number of other ambiguities, for example, whether the limit applies to the seller’s total income from the sale of all securities (shares) in the given year or to an individual income, or income from an individual security (i.e. the income from every share), or what part of the income in the given period will be exempt.

The venture capital funds, and founders and owners of start-up companies respectively, represent another negatively affected group as start-ups usually take the form of joint stock companies. Innovative technological funds should, on the contrary, be supported by the state, resp. they should not be unnecessarily hindered. The long-term objective of the state, especially today, should be the maximum support for technological development and innovative businessmen who take an active part in it by creating favourable conditions for products and services with high added value.

One can only hope that this conceptually inconsistent (non-governmental) amendment, which should be discussed in the Senate in mid-December 2020, will be reworked by the Senate and returned the Chamber of Deputies for comment.

You can also find information on this issue from our members here:

https://www.samak.cz/samak-life/aktuality/blizi-se-konec-danove-zajimavych-transakci-s-akciemi-akciovymi-spolecnostmi-

2https://nazory.ihned.cz/komentare/c1-66852910-komentar-partnera-kpmg-danovy-dort-s-piratskou-prichuti-jsou-pirati-jen-sexy-komuniste-s-internetem

Enterprise Investors announces tender offer for 100% of PragmaGO

Polish Enterprise Fund VIII (PEF VIII), a private equity fund managed by Enterprise Investors (EI), has announced a tender offer for 100% of PragmaGO, a provider of financial services to the SME sector. PEF VIII has secured the right to acquire from the majority shareholder, Pragma Inkaso, a stake that will give the fund 72.07% of votes at the general shareholders’ meeting. The maximum value of the tender offer is EUR 11.9 million.

 

  • PEF VIII’s intention is to delist PragmaGO so it can continue its development in the private market;
  • The subscription period for the tender offer will run from 16 December to 29 January 2021;
  • The tender offer share price for the minority shareholders will be 35% higher, than for the majority shareholder. This price includes a 20% premium to the share price on the day preceding the tender offer announcement and is 37% higher than the average price of PragmaGO’s shares over the last six months;
  • Once the tender offer is settled, EI plans to increase the company’s share capital by EUR 13.4 million at a price materially lower than the share price in the tender offer;
  • If the required voting threshold is reached, the fund will take measures to squeeze out those among PragmaGO’s minority shareholders who did not respond to the tender offer.

 

PragmaGO operates in the non-banking financial market, offering customers such products as factoring and purchase financing and providing businesses with both working and investment capital. The company’s offer is tailored to the needs of small and medium-sized enterprises operating in Poland. By focusing its business model on automated online processes and distribution alliances with numerous partners, PragmaGO can offer customers a comprehensive range of solutions for improving their liquidity quickly and efficiently. After three quarters of 2020, PragmaGO held a portfolio worth EUR 21.2 million, had EUR 8.1 million of equity and EUR 0.4 million of net profit.

 

Dariusz Prończuk, the managing partner at Enterprise Investors responsible for the transaction, said: “Our aim is to delist the company from the Warsaw Stock Exchange. We believe that for PragmaGO to develop and make full use of the market’s potential it needs substantial capital injection, which we are willing to provide. In addition, we intend to support the company’s management with our broad experience from previous investments in the financial and technological sectors. All this can be achieved more efficiently and quickly once PragmaGO becomes a private company”.

 

To date, EI-managed funds invested EUR 322 million in 21 companies operating in the financial sector.