September 21st, 2012, Warsaw – Ecorse Investments, a company indirectly owned by funds managed by Advent International Corporation (Advent), a leading global private equity fund, has reached a binding agreement with Krzysztof and Marzena Gradecki regarding the sale of their stake in EKO Holding Group (EKO), the Polish supermarket chain.
Under the agreement, Krzysztof and Marzena Gradecki, the majority shareholders who currently own 55% of the shares in EKO Holding, will respond positively to the tender offer announced by Ecorse Investments on September 10, 2012.
In line with the strategy presented in the tender offer documentation, and as part of the agreement, Ecorse Investment required the non-core businesses to be carved out of the Group upon the closing of the transaction. Mr and Mrs Gradecki agreed to acquire the non-core businesses from EKO Holding. As a result of this transaction, the Group will be released from approximately PLN 65,000,000 of debt and from all corporate guarantees issued by EKO Holding for the benefit of the non-core businesses. In addition, EKO Holding will receive a cash consideration of PLN 15,000,000.This transaction is conditional upon a successful closing of the tender offer by Ecorse Investment.
As part of the agreement, Mr and Mrs Gradecki provided a set of Representations and Warranties about EKO Holding Group. As a result of the agreement, Ecorse Investments has agreed to increase the price in the Tender Offer for all shareholders to the level of PLN 4.70 per share.
To secure a smooth succession process, Advent has requested that Mr and Mrs Gradecki re-invest part of their proceeds from the sale of shares in the tender offer and become indirect minority shareholders in EKO Holding alongside Advent. Both parties have agreed to a set of mutual obligations that will form the basis of collaboration in the future. Krzysztof Gradecki has agreed to become the Chairman of the Supervisory Board of EKO Holding.
Commenting on the announcement, Krzysztof Gradecki, the largest shareholder of EKO Holding Group, said: “Advent International has an in-depth expertise of the retail sector and presented a very convincing business development strategy that would allow for further independent growth of EKO Holding, both organically and through acquisitions. It is important for me and for the employees of the Group that Advent is ready to invest significant resources to support restructuring and development of the Group.”
Commenting on the announcement, Tamas Nagy, a partner at Advent International responsible for this transaction, said: “We are pleased with the agreement that has been reached with Mr and Mrs Gradecki. We are currently also in the process of meeting with the largest minority shareholders of the Group.”
About Advent International
Founded in 1984, Advent International is one of the world’s leading global buyout firms, with offices in 16 countries on four continents. A driving force in international private equity for 27 years, Advent has built an unparalleled global platform of over 160 investment professionals across Western and Central Europe, North America, Latin America and Asia. The firm focuses on international buyouts, strategic repositioning opportunities and growth buyouts in five core sectors, working actively with management teams to drive revenue growth and earnings improvements in portfolio companies. Since inception, Advent has raised €19.4 billion in private equity capital and, through its buyout programmes, has completed over 270 transactions in 35 countries.
Advent has been present in the retail market for over 27 years being one of the world’s most active investors in the retail and consumer sector. The fund has invested in ten companies over the last five years, with over 40 dedicated investment professionals focused on this sector globally. Relevant current and historical investments include Serta & Simmons Bedding, DFS, Five Below, Takko, Stokomani and Poundland.
For more information, visit www.adventinternational.com
About EKO Holding group
EKO Holding Group concentrates its activity on a supermarket chain. The Group operates a number of stores including 305 EKO stores, ca. 800 Rabat franchise stores and 165 Jasmin franchise drugstores. The Group also owns Polska Grupa Drogeryjna Ltd. (PGD) a wholesaler of household chemicals and cosmetics.