Exit Retires Advent’s Second Central Euro Fund

Target: Bolix
Seller: Advent International
Sponsor: Berger Paints India Ltd.
Financial Adviser:
Sponsor: Ernst & Young LLP; Seller: CAG
Legal Adviser:
Seller: Clifford Chance LLP

Advent International Corp. recently agreed to sell Bolix, a Polish company that makes insulation systems for buildings. Upon closing, the deal will fully liquidate Advent International’s second Central and Eastern European fund, a vintage-1998 vehicle.

The Boston-based group agreed to sell Bolix to Berger Paints India Ltd., an Indian paint manufacturer. Berger, a public company, disclosed that it paid $38.6 million in equity for the company but did not disclose the deal’s enterprise value. Advent International acquired the company in 2003 for about $40 million, including debt, according to press reports at the time.

Advent International sought to exit Bolix because it recorded double-digit revenue growth over the last three years, and because it had been in the firm’s portfolio for five years, a typical holding period, said Christian Senye, an assistant director who manages the firm’s Warsaw team. During those five years, Advent International transformed the company from a pure manufacturer to a service-oriented business by improving its delivery capabilities to construction sites. The buyout shop also expanded its product line and established new distribution networks to expand Bolix’s business in Ukraine, Russia and the Baltic states.

Senye declined to discuss the fund’s performance or the firm’s return on Bolix. But, judging from the steadily increasing size of its funds dedicated to the region, the firm’s returns appear to be pleasing its limited partners. Advent Internatiional has raised four funds targeting the region and keeps offices in Poland, the Czech and Slovak republics, Hungary, Bulgaria, Romania and Turkey.

It raised the $180 million Advent Central & Eastern Europe II LP—the fund used to buy Bolix—in 1998, and made approximately 15 investments. In 2005, the firm closed on €330 million ($510 million) for Advent Central & Eastern Europe III. That fund is now fully invested in 10 platform companies. And last month, Advent International closed on €1 billion for its fourth regional fund, with which the firm expects to write equity checks of between €30 million to €100 million. In February, the firm pooled equity from Fund III and Fund IV to buy LaborMed Pharma SA, a Romanian generric drug maker.

In the last three years, Advent International’s Central and Eastern European team has invested in eight companies and exited or partially exited seven investments, including the Bulgaria Telecommunications Company, which it sold to AIG Capital Partners for €1.66 billion.—B.V.