Mid Europa acquires Polish Cable Railways for PLN 215m

Ellie Pullen
23 May 2013

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Mid Europa Partners has wholly acquired Polish Cable Railways (PKL), Poland’s oldest cable car provider, from the state-owned Polish State Railways (PKP) group for PLN 215m.

The GP became interested in privatising the company when it identified PKL as an attractive entry route into the leisure and tourism sector, which Mid Europa thinks presents a strong growth opportunity. The deal is expected to close later on this year.

The firm invested in PKL via the business's newly created holding company, PKG, which was established by local communities in Zakopane to ensure that PKL will stay in keeping with the needs of the tourist market and local businesses in the region post-privatisation.

PKP began the privatisation process for PKL last December. It initially received 12 offers to buy the company, which were reduced to a shortlist of six in January, including Bachleda Investment Group and an unidentified private equity firm, understood to be Mid Europa. Last month PKP received five binding offers, of which Mid Europa came out on top.

Mid Europa Partners typically invests €75-200m in equity per company, with a focus on central Europe and Turkey. The firm currently has around €3.2bn in assets under management.

Company
PKL was established in Zakopane in the south of Poland in 1935. The company is the country's oldest provider of cable cars, ski lifts and ski slope services and is present mainly in the Tatra mountains range.

The company employs approximately 200 staff and recorded revenues of PLN 51.4m for 2011, with an EBITDA of PLN 25.7m and a net profit of PLN 9.1m.

People
Peter Gosek is the CEO of PKL, while James Karnowski is the president of PKP. Associate director Tomasz Blicharski, senior associate Lukasz Gawlik, associate Zofia Szewczuk, and Dominika Kozlowska all worked on the deal for Mid Europa. Zbigniew Rekusz is a partner at the firm.

Advisers
Equity – Ernst & Young (Corporate finance); CMS Cameron McKenna (Legal); DCSA (Technical due diligence).
Vendor – Weil Gotshal & Manges (Legal); PKO Bank Polski (Brokerage).