Innova Capital, the leading CEE private equity fund, sold its 27% stake in Wirtualna Polska Holding S.A. for PLN 50.00 per share.
In 2014 the Innova Capital fund financed the acquisition of Wirtualna Polska from Orange Polska and its merger with the o2 Group. The purpose of the PLN 375m transaction was to consolidate the e-market in Poland and introduce the group into the e-commerce market segment.
In just a dozen or so months the company underwent a dynamic integration process, strategy overhaul and rebranding. These initiatives gave an immediate boost to the financial performance: 2.5x increase in EBITDA and four-fold increase in market value. Fifteen months after Innova’s investment, Wirtualna Polska Holding became listed on the Warsaw Stock Exchange and the company’s present capitalisation is over PLN 1.5bn, with the share price rising by nearly 70% following the IPO. Thanks to the recent exiting the investment, Innova generated an internal rate of return (IRR) of over 60%.
“Our investment in Wirtualna Polska was very successful: in a relatively short time we have created a leader of the Polish e-market, in cooperation with the excellent team of managers. The new strategy of development and pursuing it consistently has also translated to an above-average rate of return on the investment. This is an excellent example of a Platform+ investment, assuming acquisition of two companies and consolidating them on purchase, leveraging the income and cost synergies effectively and implementing a new management structure,” comments Magdalena Magnuszewska, Partner at Innova Capital.
“The Innova Capital has undoubtedly placed much confidence in us and financed ambitious plans of the Group. I can’t remember any other transaction where a four times smaller company acquires its bigger rival. Then, in short of two years, it consolidates the market by acquiring 14 entities, successfully enters the stock exchange and moves nearly a half of its revenues from the market it has been active on for 20 years to entirely new areas. All this while constantly improving the results and increasing its market value by a few times. This is only possible in Poland. In Wirtualna Polska,” says Jacek Świderski, President of the Board of Wirtualna Polska Holding S.A.
Jacek Świderski, Michał Brański and Krzysztof Sierota, entrepreneurs with a majority stake in Wirtualna Polska, were involved in the repurchase of shares from Innova Capital and now have over 55% votes at the General Meeting of Shareholders. All remaining shares were sold to public institutional investors in the accelerated book building (ABB) process, which was closed today.
About WP Group
The Group owns one of Poland’s two most popular horizontal internet portals called Wirtualna Polska. It also runs the o2 horizontal portal and numerous specialist vertical portals, including in particular a business portal: Money.pl; a sports portal, e.g. WP SportoweFakty, a new technology portal: e.g. Dobreprogramy; entertainment portals: e.g. Pudelek and WP Gwiazdy; health and parenting portals: abcZdrowie.pl and Parenting.pl; and internet radio stations: OpenFM and PolskaStacja. In addition, the Group runs advertising business offering lead generation for internet stores, mostly through portals that aggregate the offers of internet stores (marketplace), in particular Domodi and Allani in fashion, Homebook in the home and interior decoration category, Money.pl and Finansowysupermarket.pl in financial services and wakacje.pl in tourism and recreation. The Group offers its users the possibility of using e-mail free of charge; it also conducts business on the Polish online advertising market offering its clients an extensive range of advertising products: modern display, including video advertising, advertisements distributed by e-mail, advertising for mobile devices and advertising based on a performance model. On 2 December the WP Group launches its latest project, WP Television, available from the 8th landline television multiplex and from SG WP.