Baring Central European Fund (BCEF) has reduced its holding in Topway Industries by selling its interest in the subsidiary that is the holding company of Ultex, one of Romania’s largest oil-seed crushing facilities. Shares in the company were acquired by a local businessman, investor and chairman of Romilexim, Vasile Nitescu, who has interests in the tourism, trade, agriculture and chemicals sectors. The fund retains a major stake in the Topway group, which is now focused on the processing, marketing and distribution of edible oil brands, although a buyer is sought.
Topway Industries was established in Craiova, Romania, in 1994 and began producing margarine and vegetable fats in 1995. In August 1999 BCEF invested in a capital increase for the company, alongside a group of local entrepreneurs. An initial commitment of $9.5m from the fund supported Topway’s buy-and-build expansion and further small investment rounds followed to coincide with the company’s acquisitions. Developments under BCEF’s ownership include modernisation of production facilities and new product launches.
Topway produces vegetable, edible and industrial oils from soybeans, sunflower seeds, linseed and rapeseed, supplying many of the country’s best selling brands of margarine and cooking oils. The company employs 410 people at its crushing and refining plant near Constantza and at distribution sites across Romania. Annual turnover is €40m.
In the last 18 months the group has been reorganised into three separate operating businesses. The Ultex business is the second of these to be sold following the disposal of Topway Foods International, which produces margarine, ketchup, mustard and other condiments, to Norwegian company Orkla Foods in July last year.
BCEF is part of the Baring Private Equity Partners group, which recently gained its independence from former sponsor ING, via a management buyout. Gyuri Karady, BCEF’s managing partner, said: “The exit represents a good return for our investors. It also exemplifies a new dynamic in Romania; the ascendancy of a growing number of domestic private investors who have the ability, experience and resources to invest in local companies and take these forward to the next stage of their development.”
Baring’s other investments in Central and Eastern Europe include CR Media and Poligrafia in Poland, Infopress in Romania, Falcon Vision and Allami Nyomda in Hungary and Boyar Estates in Bulgaria.