Strong result with Orange Romania

The Polish Enterprise Fund and Polish Enterprise Fund IV, private equity funds managed by Enterprise Investors, have fully exited Orange Romania, the country’s largest mobile telephone operator.

A consortium of financial investors sold its stake in Orange Romania to France Telecom, Orange’s strategic investor and majority shareholder for US$523m. The transaction yielded a 4x investment multiple for the funds.

Enterprise Investors entered the company in 1999 as part of a consortium of financial investors, which increased its participation in 2001. The group also includes Innova Capital, a Polish private equity firm, Communications Venture Partners and SG Romania Fund, which is managed by SG Asset Management.

AIG also leads an investor consortium that holds a stake in Orange Slovensko, which was acquired in 2001.

Following the transaction, France Telecom’s stake in Orange Romania will increase from 73% to 97%. The company is the largest provider of mobile telephone services in Romania, with a 48% market share.

Orange Romania’s revenues quadrupled between 1999 and 2004. Its Ebitda margin of 54% is the highest in the Orange group.

Enterprise Investors has been active since 1990 and is the largest private equity firm in Central and Eastern Europe, with more than US$1.1bn under management. Private equity funds managed by the firm have made almost 100 investments totalling US$850m and have exited 72 investments and returned US$890m to their investors.