Private equity funds Mid Europa and BC Partners have reportedly submitted binding bids for the Romanian supermarket chain Profi, owned by Polish Enterprise Fund VII (PEF VI), unnamed market sources have Mirsanu.ro.
PEF VI, a private equity fund managed by Enterprise Investors (EI), acquired 100% of Profi for €66mn in 2009 and made a €10mn follow-on investment in 2011. Since the initial transaction, Profi has increased its network at a fast pace. The transaction is estimated by market sources quoted by the website at around €600mn. If the value is confirmed, this would be the largest transaction on the Romanian retail market, significantly higher than the price paid by Auchan for Real supermarkets.
PEF VI announced in May it “plans to explore the strategic options available to Romania’s leading supermarket chain, Profi.” Local media had been long speculating that the Polish equity fund would seek to exit the shareholding of the Romanian retail chain.
The sale contract contract could be signed in the coming days, according to Mirsanu.ro. The two investment funds have already carried out due dilligence, assisted by their advisors. Both investment funds are assisted by consultants from Ernst & Young. EI is advised in the sale process by Citi and RTPR Allen & Overy. BC Parners is also advised by lawyers from Clifford Chance Badea, while Mid Europa Parners is advised by legal consultancy Bondoc & Asociatii.
Profi operates a network of nearly 500 stores in Romania and has the widest geographical coverage in the country, being present in 242 towns and villages. It has recently developed the Loco format targeting rural parts of the country. In 2015 Profi recorded €565mn in revenue and employed around 10,000 people.
In April, PEF VI signed an agreement to acquire 100% of Noriel Group, the largest toy and game distribution firm and retailer in Romania. EI, one of the largest private equity firms in Central and Eastern Europe, will provide €2mn funding to support further development.
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