Global private eqity firm CVC Capital Partners said it agreed to acquire Żabka Polska, the leading Polish convenience retailer, from Mid Europa Partners, the leading private equity investor in Central and South Eastern Europe. The deal was valued at roughly 5 billion zloty ($1.22 billion), according to Polish sources.
Founded in 1998, Zabka has grown from a single convenience store in Poznań to a countrywide network of c.4,500 stores all operated by c.3,000 franchisees.
The Zabka sale is said to be the largest ever transaction in the Polish food retail sector and the largest ever private equity exit in Poland. Together with the Alpha exit announced earlier this year, Mid Europa is poised to return over €1.1 billion to its investors during Q2 2017, it said. Mid Europa reportedly acquired Zabka in 2011 for €400 million.
“Our successful exit from Zabka validates Mid Europa’s focus on creating value through identifying, growing and exiting highly attractive retail businesses, said Robert Knorr, Co-Managing Partner of Mid Europa and head of its retail and consumer practice. “Our recent investments in Allegro and Profi reaffirm our continued commitment to the CEE retail landscape. As in Zabka, where we built a clear regional champion with a store network of 4,500 outlets, we will continue supplementing the buy-and-build strategy with strong execution.”
Mid Europa Partners is a leading buyout investor focused on the growth markets of Central and South Eastern Europe with over €4.6 billion of funds raised and managed since inception. Established in 1999, Mid Europa has pioneered private equity in the region with offices in Budapest, Istanbul, London and Warsaw.
István Szőke, Partner and Head of CEE for CVC, said: “I am delighted to announce CVC Funds’ second direct investment in Poland, demonstrating our long-term commitment to the country and the Central European region. With our office and local team in Warsaw and CVC’s global reach we are best placed to support CVC Funds’ portfolio companies in Poland.”
Headquartered in Luxembourg, CVC Capital Partners is one of the world’s leading private equity firms. Founded originally in 1981 as the European arm of Citicorp Venture Capital, the CVC Group today employs some 300 people throughout Europe, Asia and the US.
The firm was spun out from Citicorp in 1993, as an independent private equity firm. The CVC team’s local knowledge and extensive contacts underpin a proven track record of over 35 years of investment success. CVC manages capital on behalf of over 300 institutional, governmental and private investors worldwide, having secured commitments of more than $85 billion in private equity, credit and growth funds.
“We are delighted to join the CVC family, with its strong track record globally in building great businesses in partnership with stakeholders,” said Tomasz Suchański, CEO of Żabka. “Their retail expertise and understanding of the local Polish market will be invaluable to us as we enter the next phase of our development.”
The deal is subject to customary regulatory approvals, and is expected to close in Q2 2017.
CVC was advised by Greenberg Traurig, PwC, Pekao, UBS, Bain and McKinsey. ING, Pekao and Unicredit provided the financing.
JP Morgan acted as exclusive financial adviser to Mid Europa, White & Case and CMS Cameron McKenna as its legal counsels, Ernst & Young as transaction services adviser, OC&C and Beragua as commercial advisers and ERM as its environmental, health and safety adviser.