Polish Enterprise Fund VI (PEF VI), a private equity fund managed by Enterprise Investors (EI), announced on November 23 it has signed an agreement to sell its Romanian supermarket chain Profi Rom Food to private equity company Mid Europa Partners for €533mn.

This is the largest deal ever completed by a private equity firm in Romania and the largest retail deal in the country's history. The sale comes at a time when retail sales are booming in Romania, spurred on by recent VAT cuts and rising salaries. 

PEF VI acquired 100% of Profi for €66mn in 2010, just one eighth of its sale value now, and made a €10mn capital increase in 2011. Since the initial transaction, Profi increased its network at a fast pace, becoming the supermarket chain with the widest geographical spread in the country. 

Profi now operates two store formats in urban areas, Standard and City, and recently developed Loco, a format for rural parts of the country. It is the first retail chain in Romania to have created a brand dedicated to rural customers and aimed at reaching regions previously unavailable to modern retail. It operates a network of nearly 500 stores in the country, and employs around 11,000 people.

Profi Rom Food expects revenues of close to €800mn this year, which will translate into top-line and Ebitda growth of above 30% annually during 2010–2016, EI said in a statement.

“This is the most successful transaction in the retail sector in Enterprise Investors’ history, and we are proud to have been a part of Profi’s success story,” said Sebastian Krol, the Enterprise Investors partner responsible for this investment. 

“This is a great example of a company that has succeeded in transforming itself from a private business to a corporation with the support of a strong financial investor that has extensive retail experience and a very professional management team with local retail market knowledge.” 

Local media had long been speculating that the Polish equity fund would seek to exit the shareholding of the Romanian retail chain. Recently, Mirsanu.ro said quoting market sources that Mid Europa Partners was competing with BC Partners for the Romanian supermarket chain. In September Ziarul Financiar mentioned CVC Capital, Polish group Biedronka, a Turkish group and a group from the Baltic region as possible suitors for Profi.

Following the transaction, Mid Europa Partners will consolidate its position on the Romanian market. Last year, it took over 80% of Romania's second largest medical services provider, Regina Maria, in the largest deal on the medical services market.

EI is one of the largest private equity firms in Central and Eastern Europe. The company has had a continuous presence in Romania since 2000, and has invested close to €200mn in Romanian companies.