Enterprise Investors has sold its 69% stake in Polfa Kutno, a major polish pharmaceutical company. The deal represents one of the most successful exits from Enterprise Investors’ portfolio to date. The shares were sold at PLN235 each for a total of PLN310m. The sale realised a 5.4 multiple on the money invested. The deal is also one of the largest transactions to have taken place on the Polish capital market to date.
Enterprise Investors bought out Polfa Kunto from the state treasury in Poland in 1995. There were several foreign investors interested in the company, but in the end Enterprise Investors decided to sell its shares to financial investors on the Warsaw Stock Exchange, which is experiencing an upturn prior to Poland’s EU accession.
Ryszard Wojtkowski, Enterprise Investors’ partner and chairman of Polfa Kutno, said: “The sale of almost 70% of the shares of one company undoubtedly represents the largest share packet that has been sold to financial investors in the history of the Polish stock exchange. Today’s transaction confirms that the portfolio investors operating on the Warsaw Stock Exchange are able to take control in a public company and are not afraid to do so.”
Under Enterprise Investors’ ownership Polfa Kutno underwent a major restructuring and development programme. Between 1997 and 2002 the group sold operations that had limited growth potential including animal food supplements, infant nutrients and intravenous fluids and is now concentrated on over-the-counter and Rx human drugs. Since 1995 the group has invested PLN180m and fully modernised its production process. Its revenues, estimated at almost PLN250m this year, are expected to continue growing and net profit is forecast to double by 2006 from PLN31.5m forecast for 2003.
This exit follows a string of successful IPOs on the Warsaw Stock Exchange for Enterprise Investors in the last 12 months, including Grupa Kęty, Eldorado and Stomil Sanok.