Having finalized this deal Enterprise Investors now aims to merge the company with Sonda, in which EI’s fund is a minority shareholder. The merged company will be Poland’s largest fruit juice producer, with a 24.5% market share. The merger will be subject to approval by the Polish Anti-Monopoly Office.

The transaction is the largest ever completed by Enterprise Investors. It also confirms EI’s approach, which is based on close cooperation with management teams. By initiating consolidation of the market, EI takes on a role that is usually the preserve of industry players; this is possible thanks to the skills and experience of its investment team.

“The food processing industry, especially fruit and vegetable processing, has a good chance of becoming a Polish specialty in the EU. If we are not yet taking full advantage of this opportunity it is because of the industry’s fragmentation. In future there will be room for only a few leading players in each of the market segments,” said Ryszard Wojtkowski, an EI partner who is responsible for investments in the consumer goods sector.

Agros Fortuna Sp. z o.o. was set up in 2000 by merging three of Agros Holding’s fruit and vegetable processing companies. Management successfully turned the business around by implementing a radical restructuring program. At the same time it repositioned the main brands and improved the effectiveness of distribution.

Enterprise Investors, which is an investor in the most dynamic Polish vegetable and fruit juice producer, Sonda, is planning to merge Agros Fortuna and Sonda in order to create a future market leader. The closing of the transaction is subject to the approvals required by Polish law.

“The Polish juice market is fragmented, with the top five manufacturers having 66% of the market. In other European countries the premium and medium segments are dominated by one or two clear leaders. The planned merger would bring the situation more in line with the European standard,” said Ryszard Wojtkowski, Enterprise Investors partner who is leading the transaction.

Agros Fortuna Sp. z o.o. was set up in June 2000 by merging three of Agros Holding’s food processing companies. Since then management has implemented a restructuring program and successfully turned the business around. Production has been consolidated, the main brands repositioned, and distribution made more effective. In 2001 Agros Fortuna’s revenues went up to PLN 482.4 million (about $120 million). The sale of Agros Fortuna to PEF IV is based on the agreement reached by the new investor and the management team. Management is guaranteed participation in the investment.

Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested over $650 million in 85 companies across all economic sectors in Poland, Romania and Slovakia.

The consumer goods sector is presently one of the priorities in the investment strategy of the funds managed by EI.

The investment opportunity has emerged as a result of legislative changes, which have brought Polish environmental legislation in line with EU rules.

“Poland’s industrial waste management market is just beginning to consolidate, but it is still very fragmented and not yet dominated by the big multinationals. It is relatively underdeveloped. Many small family businesses offer a very narrow range of services, while clients expect a full waste management service,” said Michał Rusiecki, a partner at Enterprise Investors.

Poland generates around 1.5 million tons of industrial waste annually, but the market currently accessible for waste management companies is estimated at only about 150,000 tons, worth around PLN 180 million ($43 million). The remaining part of the market covers waste that is not processed or properly disposed of. New legislation is likely to drive strong growth in the Polish waste processing market.

Polska Grupa Gospodarki Odpadami SA, based in Łódź (central Poland), will be operating throughout the country and will focus on providing industrial customers with a complete solution to all their waste management problems. On the waste disposal side, the company will convert a significant proportion of waste into alternative fuels – an economically and environmentally friendly method. The company will follow European and Polish waste management guidelines, which call for the minimization of land filling as a waste disposal method. On the business side the company is to grow both organically and through acquisition of medium-sized industrial waste management companies that have strong customer portfolios.

Enterprise Investors is the leading venture capital group in Poland has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II and the Polish–American Enterprise Fund – have invested $680 million in 85 companies across all economic sectors in Poland, Romania and Slovakia.

“We believe that the management team is very experienced and capable of implementing the investment program and successfully expanding the business. We like the strategy of entering new regions of Poland where direct competition with foreign chains is still non-existent,” commented Jacek Siwicki, managing partner of Enterprise Investors, who is responsible for the investment in Kinoplex.

Kinoplex Sp. z o.o. (formerly Echo Cinema) is the largest Polish-owned movie theater operating group in the country and has been active since 1995. It is a private company with one of the most experienced management teams in the industry. It currently operates 28 screens at 20 locations across Poland. Kinoplex plans to open at least nine multiplexes in Polish cities with over 100,000 inhabitants within two years. Most of the new multiplexes will be located in shopping and entertainment centers.

“We believe in future attendance at Kinoplexes, particularly in cities where alternative ways of spending leisure time are very limited,” said Jerzy Kowalski, member of the board of Kinoplex.

Kinoplex’s market share is now 8%. Its total box office for 2001 was PLN 48 million ($12 million), 25.5% higher than in 2000, with 2.3 million tickets sold. Performance was particularly strong in theaters in small towns. The forecast for 2002 is that attendance will continue to increase steadily.

The movie market in Poland is very fragmented and underdeveloped. Per capita attendance in Poland (0.7) is still very low compared to that in the USA (5.5), or the EU average (2.1). Polish tickets are currently priced at $3 each, which is still below the European standard of $5–$9 per ticket.

Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested $650 million in 85 companies across all economic sectors in Poland, Romania and Slovakia. EI invests in companies with a solid management team, a strong market position, and the potential for significant local and international growth.

Since 1990 Enterprise Investors has invested over $600 million in Poland and the CEE through its four funds – the Polish Enterprise Fund, Polish Private Equity Funds I & II and the Polish–American Enterprise Fund. The 85 companies in which EI has invested span all economic sectors.

EI owns 100% of the shares of Decorador. This is the fifth retail firm in which EI has invested, after W.Kruk, Deni Cler, Eldorado, and Apteki Polskie, bringing EI’s total invested in this sector to $23 million. This is also the sixth start-up company in EI’s portfolio.

“Our faith in Decorador’s success is based on the belief that there is a growing demand for home furnishing goods in Poland and that we have trusted professionals who are experienced in retail trade to manage the project,” said Jacek Siwicki, managing partner of Enterprise Investors, who is responsible for the investment.

Decorador will differentiate itself on the Polish market by its wide range of home furnishing and décor products, attractive pricing, value-added services, store format and location. Its product categories will include textiles, home décor and accent, kitchen and dining, lighting and electric, home use, and space savers.

Decorador’s products will be functional and aesthetic, as both these factors are increasingly important to the modern Polish client. The company also aims to offer its customers a wide variety, and goods that are unique in design and character.

An important feature of Decorador will be its “above and beyond” service. Future employees are being trained to help, recommend and inspire new solutions in home design. They will be able to advise on layout and interior design, as well as helping with installation, providing tailor-made services and offering a gift registry (still a novelty in Poland).

Surveys of Decorador’s future clients show which of the concept’s key features they rated the highest:

• broad product range (29% of respondents)
• unique goods and a changing assortment (28%)
• home delivery (22%)
• spacious shops (18%)
• convenient locations (16%)

Decorador’s target is to achieve 8% market share within five years.

The new factory is dedicated to the production of tinplate and aluminum food containers for the growing Polish food industry, and will offer fish and food packers the highest standards of metal packaging produced in the most modern conditions.

The investment in the new facility will exceed $10 million and provide direct employment for approx. 300 people (a level similar to the current number at Gdańsk). The transfer of manufacturing from Gdańsk is to be completed by the end of this year.

This is the latest phase in the development of Crown Cork & Seal’s food can business in Poland, which started in 1997 with the privatization of CarnaudMetalbox-Gopak in Goleniów and then continued with the acquisition of Fabryka Opakowań Blaszanych in Gdańsk in 2000, in partnership with Enterprise Investors, Poland’s premier private equity group. This development established Crown Cork & Seal as the largest supplier of metal food packaging both in Poland and within Central and Eastern Europe.

Crown Cork & Seal Company Inc. is the leading supplier of packaging products to consumer marketing companies around the world. The company produces a wide range of metal cans and plastic containers for the food, beverage, personal care, industrial and household markets. In 2000, Crown Cork & Seal generated net sales of $7.3 billion from 223 plants located in 51 countries. Its other manufacturing operations in the region are located in Hungary and Slovakia, where it directly employs approx. 500 people. Focusing on product development and technical support for customers, the company maintains research and development centers in the USA and in the UK.

Enterprise Investors is one of the largest foreign investors and the largest private equity group in the country and in CEE. EI has been active in Poland and the region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested almost $600 million in 80 companies across all economic sectors in Poland and Romania. EI funds plan to invest an additional $300 million within the next four years.

PEF IV recently acquired shares in Zielona Budka from Paribas Affaires Industrielles, the company’s financial investor and a minority shareholder since 1998.

Consumer goods represent one of the primary target sectors in EI’s investment strategy. EI has been investing in strong local brands since 1990 and will continue this strategy in other CEE countries as well.

Zielona Budka – Zbigniew Grycan SA has the longest tradition of ice cream production in Poland, having been founded in 1947. The company started as a small, private ice cream parlor located in Warsaw. Zbigniew Grycan, its owner since 1980, has successfully transformed Zielona Budka from a local mom-and-pop operation into a large-scale business with an estimated 11% market share and one of the strongest brands in Poland. Brand recognition is the company’s most important asset – with a spontaneous brand awareness of 57%, Zielona Budka is by far the most widely recognized Polish ice cream brand. And, with a 68% acceptance level among Polish consumers, the company is comparable to other leading brands in the world.

Last year Zielona Budka moved its production facility to one of the most advanced ice cream plants in Europe, located in a tax-exempt zone in southeast Poland. The plant has a production capacity of 20,000 tons annually and maintains the highest quality standards. Zielona Budka distributes its products through its 33,000 own branded freezers located in retail points throughout Poland. Its products are also sold in all the major supermarket chains present in Poland as well as through the larger restaurant chains such as TelePizza. Zielona Budka recently developed a chain of franchised cafes – a unique concept in Poland. The current number of 26 cafes will be extended to 100 by 2002.

Following the capital increase, Zielona Budka intends to strengthen its territorial presence, increase market penetration, enter new distribution channels, and provide sales and marketing support to its distributors and franchisees. In 2000 the company sold 15 million liters of ice cream with a value of PLN 72.5 million ($18 million). In the 2001 ice cream season Zielona Budka will launch new impulse products and anticipates sales of 17 million liters.

“Enterprise Investors has been investing in and developing strong Polish brands since inception. I am convinced that our experience will add value to the company and will help Zielona Budka maintain and capitalize on its number one position among Polish ice cream brands,” said Ryszard Wojtkowski, a partner at Enterprise Investors who is responsible for EI’s investments in the FMCG sector.

Prior to coming to EI, Ryszard Wojtkowski was a member of the management board of Novartis Consumer Health (Switzerland), deputy general director of Coca-Cola’s Polish operations and president of Alima-Gerber, which created the well-known Frugo juice brand.

“Zielona Budka has been expanding rapidly for the last decade and has come to the point where it needs a strong business partner to take the company to the next level of development. Enterprise Investors is the ideal partner for us,” said Zbigniew Grycan, founder of Zielona Budka – Zbigniew Grycan.

Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested almost $600 million in 81 companies across all economic sectors in Poland and Romania.

EI has participated in the development of several other Polish companies representing the consumer goods sector, including Polar, Krosno, Sonda and W.Kruk. The funds have exited 37 investments (including Polar and Krosno) and returned over $400 million to investors.

Enterprise Investors has been investing in Poland and CEE since 1990. In the next three to four years EI plans to invest up to $300 million more in the region’s most promising businesses.

Messenger Service Stolica SA is a fast-growing Polish company founded and managed by a group of skilled entrepreneurs. The company started eight years ago as a family business run from a small flat owned by one of the founders, and grew into a complex logistics operation with sales exceeding PLN 150 million. Over the past four years sales have grown seventeenfold.

Stolica provides local, nationwide and international courier services 24 hours a day, 7 days a week. The company delivers 25,000 parcels every day and offers next-day delivery (by 8 a.m.) to any address in Poland through its chain of 43 domestic representatives. As the exclusive Polish representative of Airborne Express and Federal Express, Stolica is able to deliver parcels to 200 countries worldwide within 1-2 days. The company employs 2,500 people, including 1,300 couriers.

The Polish market for courier, express, and parcel services has been growing by 40-50% p.a. since the early 1990s, and its estimated value reached $175-195 million in 2000. Comparable statistics from Western Europe indicate that the Polish market has potential for further growth. The demand for time-definite delivery services in Poland is expected to grow at least 20% p.a. in the next few years, driven by the growth of the Polish economy, the need for Polish companies to become more competitive due to integration with the EU, and the emergence of new segments of the express courier and parcel market in Poland.

“The founders and management team of Stolica have built the leading Polish express, courier and parcel operator in Poland. We believe that with the capital provided by Polish Enterprise Fund IV and EI’s know-how, Stolica will become a thoroughly modern company able to compete with the largest players operating on the Polish express, courier and parcel market,” said Dariusz Prończuk, a partner at Enterprise Investors, who is responsible for the investment.

“The capital provided by the investor will be assigned to upgrading the IT operational system as well as constructing and equipping the hub. This is a way of strengthening our market position and maintaining volume growth at 30% p.a. With a modern infrastructure we will be able to improve quality control and security, as well as our ability to react immediately to clients’ needs,” said Zbigniew Twardowski, president of Messenger Service Stolica.

Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested almost $600 million in 80 companies across all economic sectors in Poland and Romania. The funds have exited 37 investments and returned over $400 million to investors.

EI is the only private equity/venture capital investor that plans to take advantage of the privatization of healthcare in Poland. EI’s investment strategy assumes allocating up to $50 million over the next three to four years to investments in healthcare companies in Poland. This strategy is based on the assumption that the healthcare reforms implemented in 1999 introduced a competitive market for healthcare services in the country.

“Enterprise Investors believes that market research within the medical sector will be of growing importance as the sector develops and becomes increasingly commercialized. We treat our investment as an important contribution to the Polish healthcare reform,” said Adam Kruszewski, investment director at Enterprise Investors, who is directly responsible for this investment.

Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II and the Polish–American Enterprise Fund – have invested almost $600 million in 80 companies across all economic sectors in Poland and in Romania, including $21 million in three major projects in the Polish medical services market. The funds have exited 37 investments and returned over $400 million to investors. EI funds plan to invest a further $300 million within the next four years.

Through this transaction Crédit Agricole continues to develop its European dimension by establishing itself in one of the most dynamic countries of Central and Eastern Europe. It also allows Sofinco, Crédit Agricole’s consumer finance subsidiary, to add Poland to its European network.

Credit Suisse First Boston advised Polish Private Equity Funds I & II and the two private individuals on the sale side of this transaction, while Crédit Agricole was advised by Rothschild.

Lukas Group consists of Lukas SA and its subsidiary Lukas Bank. Following rapid development, the Group reached its current share of approximately 25% of the Polish consumer credit market through a multi-channel distribution strategy using advanced technologies such as e-banking and a call center. Lukas succeeded also in developing partnerships with leading retail groups, and operates through a network of 30,000 retail outlets in Poland. Lukas Bank is a modern, rapidly growing retail bank with a nationwide network of nearly 100 branches. Lukas Group has 1,700 employees and its total assets at the end of 2000 reached €550 million.

With 16 million customers, a nationwide network of around 8,000 branches, and equity of €26.3 billion in June 2000, Crédit Agricole is the largest bank in France and among the world’s ten largest banks. Its activities include retail banking, life and non-life insurance, private banking, and asset management. Its subsidiary, Crédit Agricole Indosuez, specializes in global commercial and investment banking.

“The acquisition of Lukas immediately gives Crédit Agricole a leading position in Central and Eastern Europe’s largest market and allows it to envisage robust development in the region with the help of a quality management team. In line with the logic of its earlier investments abroad, Crédit Agricole will emphasize partnerships with other entities of the Crédit Agricole Group,” commented Gilles Gramat, managing director of Crédit Agricole in charge of international development.

Dariusz Prończuk, president of Lukas and a partner at Enterprise Investors, emphasized the following aspects of the deal: “This transaction concludes over three years of fruitful co-operation between Enterprise Investors and Lukas Group together with its management. During this period the combination of strategic advice and funding from Enterprise Investors and the managerial qualities of Lukas allowed the company to significantly grow its scope of activities and shareholder value. The transaction with Crédit Agricole provides an opportunity for this talented group of people to consolidate growth and expand the product offering. It gives Lukas’s management and employees the means to meet their ambitions and open up to the international arena.”

Enterprise Investors has been active in Poland and Central and Eastern Europe since 1990. The four funds managed by Enterprise Investors – the Polish Enterprise Fund, Polish Private Equity Funds I & II and the Polish–American Enterprise Fund – have invested almost $600 million in 78 companies representing different sectors of economy. EI funds have exited 37 investments. EI plans to invest up to $300 million of its newly raised fund, Polish Enterprise Fund IV, within the next four years.