1. HOW DID IT ALL BEGIN
Penta's initial capital originates from the business that the two founding members, Marek Dospiva and Jaroslav Haščák, conducted in China. In the early 1990s, during their studies in Beijing, they began importing Chinese textiles to chain stores in Czechoslovakia.
Back in Bratislava, Haščák and Dospiva teamed up with their future partner, Jozef Oravkin, and began trading on the newly expanded stock exchange. At the end of 1993, they founded Penta Brokers and acquired two new partners - Martin Kúšik and Juraj Herko. All of the Penta partners had been schoolmates during their studies in Moscow and Czechoslovakia. The business name, Penta, is a tribute to the five original partners who founded the company.
In the following years, the company invested mostly in options, riding the wave of some rapidly growing titles. The company suddenly started to achieve higher gains through leverage.
"Between 1994 and 1997, we were typical stockbrokers, not very different from dozens of other stockbrokers in former Czechoslovakia," explained Haščák.
2. BREAKTHROUGH DEAL
In 1996, when the NAV of the company was around 50 million Slovak crowns, Penta convinced the British Regents Fund to purchase a control block of stock of VÚB Kupón, the largest investment fund in Slovakia, with an asset value of 9 billion Slovak crowns. During the transaction, VÚB, the founding bank of the fund, started to resist. The British Regents Fund decided to pull out of the transaction. At this key moment, Penta succeeded in convincing VÚB to sell its share and finance the purchase of stocks bought by the British fund. Penta gained control over VÚB Kupón for a stock price of only 20 percent of its real market value. VÚB Kupón's acquisition opened the way for Penta to earn its first billion. This fact has caused changes in the focus of the company.
"After VÚB Kupón, we had enough capital to gain majority stakes in companies, restructure them, increase their value and then sell at a profit. These are the principles of Penta's success to this day," says Marek Dospiva.
The capital boost enabled the company to acquire the best professionals on the market. Penta currently employs around 200 of these highly skilled professionals to manage its investment portfolio, which affects more than 25,000 people.
In 1999, Penta was restructured into a holding with its mother company in Cyprus.
In the four years that followed, it realised several successful restructurings and investment transactions in Slovakia. These included VSŽ, Slovenská poisťovňa, Slovnaft, Elektrovod, Drôtovňa Hlohovec and Sanitas. The success of these purchases was based on the desire to pursue more complex projects (such as VSŽ) and the ability to restructure the companies (such as Drôtovňa, later ZSNP).
After Juraj Herko left in 2002, Jozef Špirko joined as the fifth partner. Špirko had worked at Penta since the beginning as an investment manager.
In 2002, Penta's NAV was 2 billion Slovak crowns.
4. INTO THE CZECH REPUBLIC
In 2001, Penta entered the Czech market. Penta's activities in Prague have been directed by Marek Dospiva and Martin Kúšik, who have formed a strong team of investment professionals.
On the Czech market, Penta has focused on the development of its Dr. Max pharmacies, the acquisition and development of Aero Vodochody and the acquisition of SmVaK (Severomoravské vodovody a kanalizace Ostrava), which has been one of the most successful leveraged buyouts in the Czech Republic.
5. CHANGE TO PRIVATE EQUITY
In 2005, Penta was changed its structure to that of a standard private equity company. The difference between Penta and a typical private equity fund lies in the fact that only the capital of its five partners are invested through an evergreen fund, as opposed to fundraising from other investors.
"The fundraising question appears periodically but, until now, we have always decided that freedom and flexibility in decision making is our top priority," says Jozef Oravkin.
Between 2002 and 2006, the NAV of the group has increased from approximately 70 million Euros to 460 million Euros. This is largely due to profitable investment projects such as Dôvera, Sidéria and Apollo (health insurance companies) and waterworks projects.
6. THE OTHER DIVISION
In 2005, Penta decided to diversify its portfolio. Apart from its buyout business, Penta decided to invest in real estate. The first move to this market was Bratislava Digital Park, an exclusive administrative complex, which has won prestigious architecture awards in Slovakia and abroad.
"In less than three years in real estate, we grew from absolute rookies to being one of the top three developers. In 2010, we also entered the Czech market. Our goal is to provide our clients with excellent architecture, together with utility," says Jozef Oravkin, who is also the Managing Partner for real estate.
Since 2005, Penta has begun to invest beyond its traditional Slovak and Czech markets. The first step was the expansion of Fortuna and Dr. Max platforms into Poland.
"We have realised that we are becoming a medium-size investor and that the Slovak and Czech markets are small for investments in the 80-250 million Euro range," explains Jaroslav Haščák.
This was followed by the opening of a new office in Poland, where Penta had become one of the most active investment groups. Poland has become one of the three key areas of interest for Penta.
However, a major breakthrough on the Polish market was the acquisition of Zabka, the country's largest independent food retail chain, with more than 2,000 stores, which was completed in summer 2007. It was Penta's second transaction, after Aero Vodochody, that exceeded 100 million Euros of enterprise value. In 2011, Penta sold Zabka Polska to private equity company Mid Europa Partners and is among top 3 projects in the overall history of Penta on all markets..
In 2012, Penta entered a German market by an acquisition of a mechanical engineering company Gehring Technologies and intends to allocate 25 % of Penta assets in Germany until 2015.
In 2011, Penta's NAV exceeded EUR 1 billion for the first time in the history by reaching EUR 1.07 billion; its assets reached EUR 4.7 billion.