With 2016 having been a successful year for private equity funds, Serban Roman, country director of Enterprise Investors, was part of two of the most challenging transactions of the year on the Romanian market.
Appointed in July 2015 at the helm of Enterprise Investors (EI), as the company’s country director, Serban Roman is its key figure in Romania, coordinating the activity of the local office and taking charge of deal development. From his position, he was the architect of two of the most significant transactions for both the local market and EI last year, having been involved directly in the acquisition of Noriel Group, the largest toys and games retailer in Romania, and an exit from Profi. Roman joined EI in 2008 as an analyst and was promoted to investment director after the successful acquisition of Profi Rom Food in 2010. Prior to moving to EI, he had worked for Ernst & Young (now EY) and UniCredit CAIB (the M&A arm of UniCredit).
In April 2016, Polish Enterprise Fund VII (PEF VI), a private equity fund managed by EI, signed an agreement to acquire 100 percent of shares in Noriel Group, from the Constantinescu family, Noriel’s founding entrepreneurs, and Balkan Accession Fund, a private equity fund advised by Axxess Capital.
EUR 24 million – Paid PEF VII to buy 100 percent of shares in toys and games retailer Noriel Group
As part of the deal, EI was to provide EUR 2 million in funding to support further development. With a network of 47 stores in 27 cities and a strong online platform, Noriel is the leader on the toys retail market in Romania. The company was founded by the Constantinescu family in 1995 as an importer and distributor of toys and games. In 2015, its sales grew by 26 percent to about EUR 30 million. “Once the transaction is completed, we intend to replicate our successful experience with Profi. We will strengthen the management team with industry experts and support the further rollout of Noriel stores throughout the country in order to double the number of shops in the coming years,” said Roman.
An exit from Profi Rom Food
The local retail market saw a significant move last year when PEF VI announced that it had signed an agreement to sell 100 percent of shares in Profi Rom Food, the largest supermarket chain in Romania, to Mid Europa Partners. The total equity value of the transaction was EUR 533 million, making it the largest deal ever completed by a private equity fund in Romania and the biggest retail deal in the country’s history.
Profi’s retail network currently has the widest geographical spread in Romania, with a strong presence in almost 250 cities, smaller towns and villages. In 2010 EI acquired from the founder a 100 percent stake in Profi for EUR 66 million, and made a EUR 10 million capital increase one year later. With EI’s backing, the company underwent extensive modernization, restructuring and store rollout following the acquisition. Profi soon became the most dynamic retail network in Romania, with a growth pace of over 100 new stores in the last two years. This has brought the total number of stores to date to almost 500 from 67 at the time of the acquisition.
In September last year, PEF VII announced its plan to invest EUR 34.5 million in the leading sporting goods retailer in the Balkans, Intersport ISI, through a carve-out transaction from Mercator Group. Following the transaction, which was completed in December, the fund holds 100 percent of shares in the company.
EI is one of the largest private equity firms in CEE. The firm has raised eight funds with total capital exceeding EUR 2 billion. These funds have invested EUR 1.7 billion in 137 companies across a range of sectors, including EUR 320 million in 15 companies active in the CEE retail sector. The firm has had a continuous presence in Romania since 2000, and has invested close to EUR 200 million in local companies.