Nestlé Waters has acquired Russian mineral water company Svyatoi Istochnik (Saint Springs), providing an exit for private equity investors including Delta Capital Management, Agribusiness Partners, Framlington and Renaissance Capital. Nestlé Waters, which includes Perrier, San Pellegrino and Vittel, made 11 acquisitions last year. This latest deal is reported to be worth around $50 million. Renaissance Capital acted as sole adviser to Saint Springs on its sale to Nestlé.
Saint Springs, founded in 1993 by American John King, leads the bottled water market in Russia. Over the past two years Saint Springs has also become a major player in the market for home and office deliveries of bulk water. Last year it sold over 108 million litres of water and the company expects the consumer demand for bottled water to grow by 20 per cent annually. Saint Springs water comes from an underground spring in Kostroma, 350km North-East of Moscow, which belongs to the Russian Orthodox Church. The church receives royalties from the sale of the water. Saint Springs employs 1,100 people at 18 sites across Russia.
Delta Capital Management, which manages The US Russia Investment Fund, sold its 15 per cent stake in Saint Springs. “We invested in Saint Springs because we recognised that the company had tapped a consumer market with substantial room for growth, and that the company’s leadership had a sound business strategy and a commitment to innovative management,” said Paul Sofianos, senior vice president of The US Russia Investment Fund. Delta Capital Management was set up in 1999 to mange the $440 million US Russia Investment Fund, a five year old fund of public US money. The fund invested in the company in December 1995 and June 1997.
The sale of Saint Springs is the fifth successful exit in the last 18 months for The US Russia Investment Fund. The fund has also made two new equity investments in Russian businesses this year: the Spar Middle Volga supermarket chain in central Russia and Egar Technologies, a company specialised in trading and risk management systems.