The European Bank for Reconstruction and Development (EBRD) announced on March 9 it will support the expansion of Romania’s Profi Rom Food supermarket chain with a €25mn equity investment.
Private equity firm Mid Europa Partners bought Profi for €533mn in 2016, in the largest deal ever completed by a private equity firm in Romania and the largest retail deal in the country's history.
Profi is the supermarket chain with the widest geographical spread in Romania, operating around 523 stores in more than 272 localities. The EBRD funding will be used to support further expansion of the network, in particular into smaller Romanian towns.
“With our support, Profi will open hundreds of new stores in both big and small localities of Romania, offering customers the opportunity to shop for affordable food in convenient locations while boosting the local economy and creating jobs,” said Matteo Patrone, EBRD regional director for Romania and Bulgaria. “Extending the outreach will not only benefit customers but also local producers who will have more options to sell their excellent products.”
“The company is in excellent shape and has great potential to grow in the years to come across Romania, including into smaller localities,” added Profi CEO Daniel Cirstea.
Cirstea announced earlier this year the that supermarket chain planned to open 200 new stores in 2017 and increase its turnover by up to 40%, according to Ziarul Financiar.
Retail sales have been booming in Romania, expanding by a total of 42% since January 2012, or an average annual growth rate of 9.2% per year. Growth of food sales was particularly high - 59% over the five year period.
This new financing follows a previous €25mn EBRD loan which supported the company’s growth through improved competitiveness.
The EBRD is a leading institutional investor in Romania, with investments of more than €7.3bn in 384 projects to date. In addition, the bank has mobilised more than €14bn in investment from other sources of financing in Romania alone.
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