Poland

INNOVA CAPITAL TO ACQUIRE 75% STAKE IN INELO AND OCRK

Innova Capital, a leading Central European private equity fund, is to acquire a 75% stake in Inelo and OCRK, a leading technology-based player active in drivers’ work time management systems for the transportation industry. As a result of this transaction, the fund will also gain exposure to the attractive telematics space.

On 20 October 2017, funds managed by Innova Capital signed an agreement to purchase 75% of shares in Inelo Sp. z o. o. and OCRK Sp. z o. o. S.k. The founders of Inelo and OCRK, Jakub Gieruszczak and Mirosław Stocerz respectively, will partially roll-over their holdings into minority shareholders. This has been the eleventh “Founder Succession” transaction, in which Innova has supported and partnered with Polish entrepreneurs.

“In line with our investment strategy, we are searching for companies with a strong market position which will allow us to capture premium returns. Inelo and OCRK are European leaders, with unique know-how in the area of analysis and drivers’ work time management. They also hold an attractive position in the fast growing telematics market. We are proud to become a shareholder in a Group with such potential!” – said Magdalena Magnuszewska, Partner at Innova Capital, who is leading the investment.

“We strongly believe that based on its solid foundations, know-how, and technology, the Group will continue its dynamic growth, both domestically and in the global market” – said Magdalena Magnuszewska.

Inelo and OCRK provide comprehensive solutions for the transportation industry, mainly in the area of work time management and telematics. The Group’s strong market position is reflected in the fast growth of the business (~30% historical revenues CAGR). It benefits to a large extent from subscription-based revenues – while, thanks to its state-of-the-art technology, the business is highly scalable. At present, the software developed by Inelo is used by control authorities across 13 EU countries. The Group has also built a particularly strong position in the area of WTM and telematics for small and medium-sized fleets.

“Over 15 years on the market, we have become a leader in the drivers’ work time management area, both for transport companies and control authorities across Europe. We hope that thanks to the involvement of this new investor we will be able to accelerate growth and gain new business partners across multiple international markets” – said Jakub Gieruszczak.

In 2016, the total revenues of the Group totalled PLN 58 million, with over 10,000 clients and 3,500 employees of the control authorities using its software. Both companies’ representatives advise the European Commission and conduct training sessions for transportation inspection authorities, police forces, and other control authorities. The Group employs over 450 employees.

ocrk About OCRK: Ogólnopolskie Centrum Rozliczania Kierowców is a leading player handling drivers’ work time management, operating on the Polish market since 2002. It employs over 260 experts and specialists in labour and transportation law of Poland and the EU, with a vast experience in the transportation & logistic industries. OCRK, constantly monitors the legal and economic situation across the transportation industry in Europe, in order to provide the highest quality and most comprehensive services.

About Inelo: Inelo offers top quality software for analysis and management of drivers’ work time and is a developer of telematics solutions offered to the transportation industry. It also renders training and advisory services for the companies operating in the transportation industry. The company employs over 190 people in four areas of its operations: Sales, development/IT, Services and Administration.

INNOVA ACQUIRES 75% STAKE IN OFFICE SEATING BUSINESS PROFIM

RealDeals 17 May 2017

Innova Capital, the CEE-focused private equity house, has acquired a 75 per cent stake in Poland-based office seating manufacturer Profim.

Two of the founders of Profim, including its chief executive officer Ryszard Rychlik, will continue as shareholders.

In 2016 Profim generated around PLN470m (€112.12m) of revenues, of which 70 per cent were delivered through exports.

The company’s distribution network includes over 1,000 dealers in 30 countries.

This is the tenth founder succession transaction executed by Innova Capital in recent years. A similar model was applied to deals including Dom Finansowy QS, Marmite, Neomedic, Mercor and Donako.

“Founder succession deals are the core transaction type for Innova,” senior partner Andrzej Bartos said.

INNOVA CAPITAL SOLD ITS STAKE IN WIRTUALNA POLSKA

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.

CAPITON EXITS FLEXIBLE PACKAGING BUSINESS SCHUR FLEXIBLES TO LINDSAY GOLDBERG AND MANAGEMENT

The Schur Flexibles Group, headquartered in Baden, Austria is a European market leader in the flexible packaging industry. The company was created over the past five years by capiton and the CEO and co-owner Jakob A. Mosser, in the context of a buy-and-build concept.

schur-flex

Today, the group consists of twelve companies with eleven production sites in Germany, Finland, Denmark, Holland, Poland, Slovakia and Greece. In 2015, the group generated sales of almost € 370 million and employed more than 1100 staff.

The product portfol schur-pictures io of the company consists of specialized high value added flexible packaging solutions for the food, tobacco and pharmaceutical markets. The company also covers the entire value chain of the packaging industry, from raw material sourcing to extrusion, printing, lamination and converting.

capiton acquired the first company of the group, CFS Dixie GmbH, in December 2011. The nucleus of the group was then purchased in early 2012 with the take-over of the Schur Flexibles Division (four companies) from Schur International (Denmark). Five further businesses were acquired until the end of 2014 to create the Flexibles business that exists today. In 2014 PS Polymer Sourcing, Warburg Germany was founded as an additional separate business unit.

As part of the share sale signed now, the shareholders of Schur Flexibles have sold their shareholdings to Lindsay Goldberg, represented in Europe by Lindsay Goldberg Vogel, and the management team. The new owners intend to continue the successful buy and build concept through the acquisition of further target companies, some of which have already been identified.

INNOVA AWARDED AT INVESTMENT FORUM & PRIVATE EQUITY GALA

Another edition of the prestigious “Investment Forum & Private Equity Awards Gala” conference, bringing together the leaders of investment markets, took place on June 6 at the Westin hotel in Warsaw. For the seventh time the leading representatives of the private equity sector discussed the future of the sector and the most important issues for Polish companies and investors. The conference was organized by Executive Club under the patronage of the Polish Private Equity and Venture Capital Association.

The conference gained the status of the most important event on investments and Private Equity in Poland and has been attracting leaders of investment markets, top management of the largest Polish companies, as well as investors and entrepreneurs for years. The invited speakers, most renowned representatives of the industry, debated among others, on the possibilities of acquiring capital for global development and long-range perspectives for the export directions of domestic companies.

The results of the fifth edition of the “Private Equity Diamonds” Competition in 2016 gave Innova Capital two prizes in the following categories:

PE Portfolio Company of 2015– Grupa Wirtualna Polska

Fund of the Year 2015– Innova Capital

INNOVA EXITS BATHROOM MARBLE PRODUCER MARMITE TO CRANEMERE LTD

On 12 May 2016 Innova together with other minority shareholders sold their stakes in Marmite – the leading European cast marble sanitary ware manufacturer – to Cranemere Ltd. in one of the biggest deals in Poland this year.

Innova purchased a controlling stake in gfx_logo Marmite from its founder Roger Johansson, in 2010. Under the leadership of CEO Robert Rutkowski and his team, the Company pursued its strategy of European expansion, product and material innovation and operating improvements, further extending its leadership position on the European market.

Business transformation and founder succession

During its holding period Innova helped steer through the transition from founder to a world-class management team. During 2010-2016 Marmite built a pan-European sales force, improved productivity and capacity in its Poznan production plant, and developed a top-class design capability recognized by the international iF, Red Dot and AꞋDesign Awards.

With ca. EUR 50m of annual sales and the majority of its products sold for export, Marmite is the leading European producer of cast marble sanitary ware and the only supplier capable of meeting the highest standards of the largest and most demanding European customers in terms of volume, quality and just-in-time delivery. “Marmite is a truly world class company, headquartered here in Poland. We are delighted.” said Olivier Weddrien – Head of Cranemere’s European activities. “Innova seeks high-value-added manufacturing businesses that can establish leadership not just in Poland, but across Europe. We are therefore very proud of what has been achieved by Marmite” responds Rob Conn, Innova’s Founding Partner.

This is the 9th Founder Succession deal in which Innova takes a majority stake and partners with business founders to build their company “to the next level”. “Innova was my partner of choice, and I am very happy with our partnership and what has been achieved over the last five years”, said Roger Johansson, Marmite’s founder.

Exit

Cranemere Ltd. purchased a 100% stake in the Company.

About Marmite

Marmite is the leading European manufacturer of washbasins, shower trays and bathtubs made of cast marble. The company brings together natural mineral materials, sophisticated technology and develops efficient cast marble innovations. Marmite has 40 years of industry experience, hires over 550 employees and uses its 7 fully organized production lines with a total capacity of 1.4m units/year to manufacture products for more than 200 clients from nearly 40 different countries.