On May 1, 2020, the Act No. 119/2020 Coll., which concern various legal regulations in the area of regulating business on the financial market, will enter into force. This Act, among other things, significantly amended Act No. 240/2013 Coll., on Management Companies and Investment Funds.
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Due to the COVID-19 outbreak and following precautionary measures, the Private Equity industry is heading a crisis, there is no doubt about it. But how to respond to this situation?
Many investors already experienced critical times. However, the coronavirus impact is fundamentally unique. What are the possible impacts of a market disruption on the business and operations of a portfolio company?
And what about the impact on fundraising activities in 2020. Which strategies are most attractive to LPs considering fundraising? What are the plans of LPs & GPs in this regard?
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Mid Europa Partners (“Mid Europa”), the leading buyout investor focused on the growth markets of Central and Eastern Europe, announced today the agreement to merge its portfolio company, CMC İletişim ve Çağrı Merkezi Hizmetleri A.Ş. (“CMC”), with Meritus Upravljanje d.o.o. (“M+ Group”), in return for a 30% equity stake in the combined group. M+ Group is a regional business process outsourcing service (“BPO”) provider and is a subsidiary of the company Meritus ulaganja d.d. (ZSE: MRUL), and CMC is the largest independent outsourced call centre and customer management services provider in Turkey with more than 4,000 employees. Following completion of the transaction, M+ Group is expected to emerge as the leading regional contact centre and business process outsourcing services provider in South Eastern Europe (“SEE”).
Kerim Turkmen, Partner of Mid Europa commented: “We are delighted to become a shareholder in a significantly larger and diversified regional operator. We believe in the long term growth prospects of the BPO industry in our region and globally and are committed to our future cooperation with M+ Group in creating the leading regional BPO services provider. The focus of the combined business will be on serving the most demanding international blue chip clients.”
Zvonimir Mrsic, President of the Supervisory Board of M+ Group commented: “The strength of the new group is reflected in the fact that this transaction makes us one of the largest private employers in Croatia, with more than 7,000 employees. M+ Group will now serve more than 220 clients in 58 countries worldwide, generating an annual turnover in excess of EUR 65 million. Our international expansion continues with a focus on the acquisition of new global clients and the export of services as we contribute to the economic prosperity of Croatia and the region as a whole.”
The transaction is expected to complete by the end of January 2020.
| Address |
| V Celnici 1031/4 110 00 Prague 1 +420 224 931 366 +420 224 931 368 www.asbgroup.eu pstudnicka@asbgroup.eu |
| Contact |
| Petr Studnička Managing Partner pstudnicka@asbgroup.eu |
| Information about the company |
ASB Group is a professional outsourcing provider of high-standard services operating in the key countries of CEE region. ASB focuses on investors in the area of private equity and venture capital. Their complex scope of services includes not just accounting and tax services, payroll and HR advisory but also transaction services both on the buy and the sell side, for strategic and financial investors, both in the local or international market. Beyond clients´ transactions, ASB performs financial and tax due diligence projects, support transaction negotiations and advise clients on purchase price calculations. |
Polish Enterprise Fund VII, a private equity fund managed by Enterprise Investors (EI), has signed an agreement to sell Danwood, the number one manufacturer of prefabricated turnkey houses in Germany and Poland. The buyer – GS Engineering & Construction – is one of the biggest construction companies in South Korea.
Danwood, headquartered in Białystok and with two production plants in Bielsk Podlaski, designs and builds ready-to-move-in houses for individual customers. In December 2013, EI acquired the company in a carve-out transaction from Budimex SA. In the year of the investment Danwood delivered 685 houses, generating revenue of EUR 99 million. By the end of 2019, the company’s production capacity reached 2,000 houses and revenues exceeded EUR 274 million.
Between 2014 and 2019, Danwood invested over EUR 27 million in expanding its production capacities. The workforce more than doubled in this period, numbering more than 2,000 employees by the end of 2019. The company operates in five European countries, including Germany, where for the last four years it has been the top player in its market. With its comprehensive portfolio and value-for-money solutions Danwood is a one-stop shop for prospective homeowners looking to buy a turnkey house in the mid-range segment – the most attractive part of the market in terms of size and growth dynamics. Thanks to its best-in-class production facilities, construction site teams, engineering staff and architects, Danwood will continue to grow on the back of the prevailing market trends.
„It was a real pleasure to work with Danwood’s management team led by Jarosław Jurak” said Sebastian Król, the partner at EI responsible for this investment. „ogether we have built a company that not only surpassed the market in terms of growth, but tripled production capacity, developed a unique and effective approach to sales and achieved operational excellence that will fuel this growth in years to come,”, he added.
Commenting on the transaction, Jarosław Jurak, president and CEO of Danwood, said: „We strongly believe that under the new ownership Danwood has the potential to further strengthen its market position in Europe and reach for new markets outside the EU, becoming a global leader in the production of energy-efficient prefabricated houses.”
The Czech investment company Jet Investment has concluded a contract to sell its 100% stake in MSV Metal Studenka to MORAVIA STEEL. The steelmaking company is among the most important industrial groups and steel producers in Central Europe with substantial activities in the forging industry. The terms of the agreement are not being disclosed.
The agreement marks another successful divestment from the portfolio of Jet 1 fund after recent sales of LESS & TIMBER and BENET AUTOMOTIVE.
“The selling of MSV Metal Studenka to a strategic partner is a successful outcome of our restructuring efforts that we have been making for the last seven years. In the course of our management, the insolvent company has become a clear market leader in the forgings and subassembly for railways in Europe. Since our entry, we have doubled the profits and revenues of the entire group,” says Marek Malík, Partner in Jet Investment. “We have accepted the offer from MORAVIA STEEL mainly because we believe that joining MSV Metal with a respected steel producer and a major player in the forging industry will enable this company to grow further.”
Jet Investment Project Director Jan Sklenar said: “We are handing over a platform in excellent condition, strengthened by investment and with a full order book for the next period.” The group consists of the Czech MSV Metal Studenka, a. s. as well as Polish Kuźnia Ostrów Wielkopolski Sp. z o.o. In addition to the current organic growth, it was the purchase of a Polish competitor in 2017 that brought a significant positive development of economic indicators thanks to the synergies between the two companies. Besides, Jet Investment invested heavily in products and technologies during the holding of MSV Metal Studenka. Since 2013, the investments have amounted to EUR 15 million.
MSV Metal Studénka, the direct successor of Vagonka Studenka, is a comprehensive manufacturer of forgings and components for rail vehicles. It is one of the largest suppliers to the railway industry in Europe with a history dating back to 1900. Significant customers include all renowned European state railways such as DEUTSCHE BAHN AG, ÖBB, SNCF, SNCB, CD, RENFE, and some non-European railways such as TCDD, ONCF, SNTF, and more. MSV Metal Studenka also supplies its components to all major European freight wagon manufacturers.
Together with dozens of subsidiaries, MORAVIA STEEL is an important industrial group in Central Europe and the most significant Czech steelworks with domestic capital. It exports its products to more than 60 countries on all continents.
PwC Czech Republic provided advisory services to the seller in this transaction; legal services were provided by DRV Legal.
SkyLimit Industry have acquired a majority 70%+ stake in VMK-CZ from FOREZ – the Czech automotive parts manufacturer. FOREZ will retain a minority stake in the company and its key management will continue in their roles. As a part of the transactions, the managers will also buy-in minority stakes in VMK-CZ.
Following the recent acquisitions of STS Olbramovice, INOX Technology, Ventos Energy Solutions and TECHNIK PARTNER, VMK-CZ is the fifth acquisition of the Fund, focusing on medium sized mechanical engineering companies in the Czech Republic, in total and third in the segment of industrial automation. This segment is characteristic by a high degree of qualified labour and it curently belongs to the fastest developing industrial branches.
Having been established in 1999, VMK-CZ employs 36 people and focuses on the design and manaufacture of single-purpose machines, automated production lines and robotic workstations, including their own electrotechnical and software solutions. It serves clients in the automotive, healthcare, food and other industries and posted a turnover of over 100 mil. CZK in 2018.
SkyLimit Industry group now includes a portfolio of five independent companies with an aggregated turnover of over 600 mil. CZK, with 300 employees and total assets of over 400 mil. CZK. The companies share and develop synergies in the manufacturing process, commercial, technical and managerial know-how.
Source: Skylimit
ARX Equity Partners (“ARX”) completed the majority acquisition of TES Vsetin (“TES“). Headquartered in Vsetin, Czech Republic, TES (https://www.tes.cz) is an engineering company engaged primarily in the manufacturing of system components related to electrical machines, in addition to the design and manufacturing of its own proprietary electric machines, such as generators and electric motors. TES supplies critical components and machines to several blue-chip customers across various industries. The company generated revenues of over € 60 million in 2018 and currently employs around 600 technically skilled staff.
ARX acquired the business from an affiliate of Advent International. Financial details of the transaction were not disclosed. As part of the transaction, ARX has agreed to partner with the company’s existing management team, who will lead the future growth and development of the Company.
TES represents the fourth investment from the ARX IV fund.
Source: ARX Equity Partners
Mid Europa Partners (“Mid Europa”), the leading private equity investor in Central and Eastern Europe, announced today the agreement to sell Walmark a.s. (“Walmark” or the “Company”) to STADA Arzneimittel AG (“STADA”). The transaction is subject to customary anti-trust clearance and is expected to close in Q1 2020.
With a unique portfolio of iconic brands and direct presence across nine European Union countries, Walmark is the leading consumer healthcare company in Central and Eastern Europe.
Matthew Strassberg, Co-Managing Partner of Mid Europa commented: “The acquisition by STADA validates Walmark’s transformation from a family-led business to an international platform. Working in partnership with new management team, we have achieved our original vision for the Company and created a valuable strategic asset by developing and implementing a thorough approach to operational excellence and focused product innovation. We would like to thank Walmark management and employees for their dedication and contribution over the past several years. We are confident that with the benefit of the resources of STADA, a global healthcare company with a 120-year history, Walmark will continue in its track record of success in our region and beyond”.
Miro Slezak, CEO of Walmark, commented: “This transaction recognizes the value of Walmark’s unique brands as well as strong organization attracting some of the best talent across our markets. We are very pleased to be joining STADA, as we share a common purpose of supporting our customers to live healthier lives and we are excited for the new opportunities for our employees as part of a larger company. We are grateful for Mid Europa’s support and strong commitment to the Company’s long-term strategy throughout their investment”.
Viktoria Habanova, Principal of Mid Europa who covers the Czech and Slovak markets said: “Mid Europa’s investment in Walmark as well as other successful partnerships with market-leading management teams and entrepreneurs in the Czech Republic and Slovakia, such as Karneval, CRa, and Alpha Medical, illustrate our on-going commitment to these markets where we have invested over €1 billion over the past 15 years”.
The transaction execution was led by Viktoria Habanova with the support of Tomas Vrba and Rustam Kurmakaev.
Rothschild & Co acted as exclusive financial adviser to Mid Europa, Weil Gotshal & Manges with the support of White & Case and AK Jan Evan as its legal counsel, PwC as transaction services adviser, and Boston Consulting Group as its commercial adviser.
Source: MID EUROPA