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Polish Enterprise Fund VIII, a private equity fund managed by Enterprise Investors (EI), will invest EUR 25 million in Software Mind, a Polish provider of software development outsourcing services.

• Software Mind is an operating division of Ailleron, a company listed on the Warsaw Stock Exchange. As part of the transaction it will be carved out from the parent company, subject to approval at Ailleron’s extraordinary general meeting;
• The transaction will consist of a EUR 9 million buyout of 26.7% of Software Mind shares from Ailleron and a EUR 16 million capital increase, which in effect will raise PEF VIII’s stake in the business to 50.2%.

Software Mind is a Polish software company founded in 1999. It develops comprehensive (end-to-end) software solutions for high-profile clients that include PE-backed financial and technological industry leaders as well as Silicon Valley unicorns. Among Software Mind’s many clients are companies from the fintech, healthcare and high-tech sectors from the United States, Great Britain and Scandinavia, as well as the four largest mobile operators in Poland and a few that are based abroad. The management team is led by its original founder and represents a well-balanced mix of commitment, seniority and technical expertise.

The company operates out of four development centers across Poland: in Kraków, Rzeszów, Warsaw and Bielsko-Biała, and employs 370 IT professionals. Software Mind establishes long-term partnerships with clients, helping them to scale their dynamically growing businesses. It has a strong track record in supporting the digital transformation of companies around the world by merging with their in-house R&D teams and working on product development as well as new channels of communication with the clients’ customers.

Software Mind has historically achieved very dynamic growth, both by acquiring new accounts and by increasing the scale of business with existing ones. The growth continues this year, as confirmed by record high account acquisition and strong year-to-date results, with sales reaching EUR 15 million after first nine months of 2020.

“The company’s long-term goal is to deliver specialization at scale, by providing high-level expertise in several industries or technologies”, said Rafał Bator, the partner at Enterprise Investors responsible for this investment. “I am convinced that the planned capital increase will enable Software Mind to quickly obtain new competencies and markets, also through add-on acquisitions. We plan to grow the company exponentially, and I think the expertise we have gained by investing in companies that are great examples of the buy-and-build strategy, such as AVG Technologies, BLStream and intive, will also come in handy”, he added.

Polish Enterprise Fund VII (PEF VII), a private equity fund managed by Enterprise Investors (EI), has signed an agreement to acquire the remaining 35% stake in PAN-PEK, a leading bakery producer and retailer in Croatia.

• EI agreed with Mr. Ivan Parać, the founder of PAN-PEK, to buy out his stake;
• PEF VII originally bought a 65% stake in the company in May 2018. Upon completion of the transaction, PEF VII will become 100% owner of PAN-PEK;
• The value of the transaction was not disclosed;
• The completion of the transaction remains subject to obtaining the customary anti-monopoly permit.

PAN-PEK was established in 1992 and is one of the biggest producers of frozen bakery products in the Adriatic region. The company serves modern grocery retailers in Croatia and operates its own 65-store chain of bakery outlets, predominantly in the Zagreb area but with a growing presence in other cities and larger towns as well as along the Adriatic coast. PAN-PEK sells a variety of breads, baguettes and sandwiches through grocery retailers and its own chain. It has been continuously developing its range in the past two years so as to offer its customer base the best products. The main factory is in Zagreb, with a second smaller plant located in Dakovo, Eastern Croatia.

“We would like to thank Ivan Parać for our partnership over the last two years. Mr. Parać is a highly experienced and skilled entrepreneur and under his management PAN-PEK has continued to acquire new customers and add new outlets to its retail chain, thus leading the company to achieve a record level of EUR 36 million of sales in 2019. We will carry on his efforts to strengthen PAN-PEK’s leading position in the Adriatic region under the leadership of the current CEO, János Király,” said Enterprise Investors partner Michał Kędzia, who is responsible for the investment.

Alexander Kosovský (34) joins Jet Investment as Director / Investment Projects. He will be responsible for the identification of investment opportunities for the Jet 2 Fund. “I am joining the team of Jet Investment at a dynamic time when, due to the economic turbulence of the past year in the Czech Republic and abroad, many exciting opportunities are opening up for investors. In the Jet 2 fund, almost three billion crowns are available for purchases, which we want to allocate to two to four projects,” Kosovský comments. “We see several attractive acquisition targets on the market that fit well into the funds’ investment strategy.” Alexander’s prior experience includes a position with Genesis Capital, where he was responsible for the identification of investment opportunities across industries in the Czech Republic, Slovakia and Poland. As Investment Manager, he led two investments – POS Media and Stangl Technik Česká republika/Stangl Technik Polska.He started his career in investment banking divisions at the Royal Bank of Scotland and J.P. Morgan in London and in transaction advisory at Ernst & Young in Prague, later he worked as an investment advisor for a major international industrial group. Alexander studied Economics and Finance at Queen Mary College in London and holds the CEMS Master in Management degree from HEC Paris and the University of Economics in Prague. He speaks Czech, English, Russian and French.

Genesis Capital, one of the largest private equity groups in Central Europe, is preparing to launch a new fund, Genesis Private Equity Fund IV (GPEF IV); the sixth private equity fund of Genesis Capital in the 20 years since its establishment. In a similar manner to its predecessors, GPEF IV will also focus on investments into small and medium-sized enterprises with high growth potential in the Czech Republic, Slovakia, Poland, Hungary and Austria. The fund’s target size is EUR 150 million and its first closing is expected at the beginning of 2021.

“We are pleased to be able to contribute to the development of businesses in the Czech Republic, Slovakia and neighbouring countries of Central Europe through our private equity funds. We believe that GPEF IV will facilitate growth of at least a dozen Central European companies that will be interested in this type of equity financing,” says Jan Tauber, Chairman of Genesis Capital Equity. “We want the new fund to replicate the attractive performance of our previous funds,” adds Jan Tauber.

“GPEF IV will invest in established companies with a strong growth potential, typically in situations where successful founders are considering suitable successors, or are looking for capital to grow their businesses, expand internationally or invest in innovations, or alternatively in cases where multinational groups looking to divest their non-core business units are searching for a suitable partner. We see a number of opportunities in this segment of the market which itself is growing and becoming more regional, so we decided to launch a new bigger fund to support them” says Ondřej Vičar, Managing Partner at Genesis Capital Equity. When speaking about GPEF IV’s strategy, he notes that “the fund will invest across a wide range of industries, but with preference for sectors where Genesis Capital funds have had a strong historical track record, such as B2B services, light and medium manufacturing, IT services and specialised retail and consumer services.”

Regarding its sixth private equity fund, Genesis Capital will follow the same investment strategy that has proven successful in the past. “We identify suitable investment opportunities using several basic criteria,” explains Radan Hanzl, Partner at Genesis Capital Equity. “First and foremost, the company must have a strong growth potential and demonstrate the ability to formulate and successfully execute its plans. A competent and experienced management team is another highly important factor. We rely on partnership with top executives of the portfolio companies. They usually invest alongside us and share the up-side as well as the risks of the investment,“ adds Radan Hanzl.

“Launching and developing a new fund is a great professional opportunity. We believe that despite the current situation, there are numerous companies with experienced management teams and the ambition of developing their business to a higher level that are at the same time able to efficiently use private equity capital. Our professional investment team at Genesis Capital is ready and looking forward to take on the challenge,” concludes Tatiana Balkovicová, Senior Investment Director at Genesis Capital Equity.

Through its fund of qualified investors Jet 2, the Czech-based investment company Jet Investment has acquired a 70% stake in 2 JCP, a company with a production plant in the Czech Republic and sales and technical branches in the United Kingdom and the USA. The Jet 2 Fund plans to further develop the successful supplier of filtration and acoustic solutions for leading gas turbine manufacturers and make use of synergic effects with other companies from its energy platform.

2 JCP employs a total of 315 employees in three countries and achieved approximately CZK 100 million in EBITDA last year. “In the first phase, the Jet 2 fund bought a 70% stake from three Czech owners, but we count on an option to buy another approximately 15% to present itself within four to five years. The remaining 15% will remain in possession of the group’s key managers,” explains Marek Palička, the project director in Jet Investment. At the same time, two of the three current Czech shareholders will remain active members of the management and will actively participate in managing and developing the company. “I took 2 JCP over from my father, who built the company from scratch. After 26 years of successful leadership, however, it is time to sceptre and find a partner with enthusiasm and sufficient resources to ensure the further growth and stability of the company. I have full confidence in Jet Investment. I believe that it will continue the work we have started, and in which I will continue to participate myself as a minority owner and manager,” comments the original majority shareholder Jan Pačes on the decision to sell his share.

In the usual fashion, Jet Investment is going to develop the company. “2 JCP has a high-quality management team that has been able to build a prosperous and robust company supplying products to the world’s largest OEMs. By combining their experience and our know-how, we will strive to strengthen 2 JCP’s position on the gas energy market,” comments Igor Fait, partner and founder of Jet Investment, on the acquisition of a company, the revenues of which have been growing at a double-digit rate in recent years. His team also plans to implement appropriate elements of a corporate governance structure to better correspond to a company operating in three countries on two continents.

Roklen Corporate Finance was an advisor during the entire sales process.

2 JCP with its headquarters and production plant in Račice and sales and technical branches in Great Britain and the USA was established in 1992. 2 JCP is a global supplier of equipment for gas turbines, submarine systems and pressure pipes, food and packaging structures. It supplies its products and services to 50 countries around the world and also has engineering offices and manufacturing facilities in North America, Europe and Asia. The company helps its customers achieve better performance and reliability through innovative air filtration, temperature and noise control solutions.

Polish Enterprise Fund VI, a private equity fund managed by Enterprise Investors, has sold its remaining 34.4% stake in Novaturas, the largest tour operator in the Baltic States, through a series of secondary transactions on Nasdaq Baltic. The transactions generated gross proceeds of EUR 4.9 million.

Novaturas was established in 1999 and soon became the most widely recognized tour operator in the Baltics. In 2007, Enterprise Investors acquired a 71% stake in the firm investing in its further growth. The company’s first-rate reliability and reputation, together with the Baltic States’ good macroeconomic position and growing consumption, have helped Novaturas become the number one market player in the region. Today it is the leading tour operator in Lithuania, Latvia and Estonia, both in terms of sales value and passenger volumes.

The company uses diverse and complementary distribution channels – it works with over 400 travel agencies, including all the major ones in the Baltics and more than 60 in Belarus. Novaturas also operates its own stores in Lithuania, Latvia and Estonia, and is developing an e-commerce channel. In 2019, the company reached EUR 179.9 million in revenues, with EBITDA of EUR 4.4 million.