Mid Europa sells Zabka to CVC in largest ever Polish PE exit

Mid Europa's exit of the Polish supermarket group comes shortly after its acquisition Romanian grocery chain Profi from Enterprise Investors, in what was the largest ever Romanian private equity transaction.

The selling GP said in a statement the exit of Zabka marks the largest ever sale of a Polish private equity asset. According to unquote" data, the largest exit registered in Poland since 2001 was the €600m sale of media and communications company Aster by Mid Europa and ICG in 2010.

A source close to the transaction said the SBO's enterprise value was in excess of €1bn and produced returns of 3.3x money for Mid Europa Fund III, the 2007-vintage €1.5bn fund that acquired Zabka in February 2011. The deal is expected to close in Q2, subject to customary approvals.

During Mid Europa's six-year ownership, Zabka added 500 stores a year, tripled revenue and nearly quadrupled EBITDA, partner Pawel Padusinski said in a statement.

With CVC as its new owners, Zabka continues nearly two decades of private equity ownership, which began in 2000.

Previous funding
PineBridge Investments was the first private equity backer of Zabka, acquiring a minority stake through a capital injection in November 2000.

The GP sold its stake as part of a €131m EV secondary buyout in May 2007, which saw Penta Investments acquire 100% of the company.

Four years later, Mid Europa acquired the company in a €370m EV deal, ahead of Tesco and BC Partners. Penta was said to have made a 60% IRR on the sale, which featured Ardian as an equity syndicate, according to unquote" data.

Ardian and Mid Europa supplied a follow-on PLN 250m capital injection for Zabka in May 2013. Additionally, a €295m refinancing was completed in December 2015.

Company
Headquartered in Poznan, Zabka Polska is a supermarket chain operating in Poland.

It operates 4,500 stores under the Freshmarket and Zabka brands, and was founded in 1998.

People
Mid Europa – Pawel Padusinski (partner); Robert Knorr (co-managing partner); Berke Biricik (associate director); Lukasz Wloadarczyk (senior associate); Bartosz Malecki (associate).
CVC Capital Partners – Krzysztof Krawczyk (partner, head of poland).
Zabka Polska – Tomasz Suchanski (CEO).

Advisers
Vendor – JP Morgan (corporate finance); White & Case (legal); CMS Cameron McKenna (legal); EY (financial due diligence, tax); OC&C (commercial due diligence); Beragua (commercial due diligence); ERM (environmental due diligence, other due diligence).
Equity – Greenberg Traurig (legal); PwC (financial due diligence).

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• Topics
• Exits
• Consumer
• CEE
• Mid Europa Partners
• CVC Capital Partners
• Secondary buyout