Penta significantly increases its stake in EM&F and sums up 2 years of successful restructuring and value creation process in the company. Penta and Krockella announced the public tender offer for the remaining EM&F shares.
Penta Investments, a Central European investment group operating in healthcare, financial services, manufacturing, retail and real estate, a 38.2% shareholder of Empik Media & Fashion S.A. (EM&F), and Krockella Limited, a company belonging to a Slovak financial investor, under agreements signed on 3rd March 2016, have purchased the investment vehicles holding in total 37.2% shares of EM&F, belonging to subsidiaries of Eastbridge S.a.r.l., and now jointly hold 75.4% of the company’s shares.
Penta currently holds, through its subsidiaries, 50% (minus two) of EM&F shares, representing 50% (minus two) of the total of votes in EM&F and as a consequence of a held stake – will have the lead in the investment. Penta’s partner in this investment – Krockella Limited holds, through its subsidiary, 25.4% of the shares, representing the same percentage of the total of votes in EM&F.
Penta Investments and Krockella Limited and their respective subsidiaries, entered on 3rd March 2016 into cooperation and a shareholders agreement and have jointly announced a tender offer for the purchase of the 24.6% remaining shares of EM&F, representing24.6% of the total of votes in EM&F.
According to the agreement, Krockella s.r.o. (subsidiary of Krockella Limited) shall be the only entity purchasing the shares in the public tender offer. The price set out in the tender offer is PLN 3.49 per share.
The tender offer subscription period will last from March 25th until April 25th 2016 and is serviced by Trigon Dom Maklerski S.A.
“Penta invested in EM&F in 2012, which was then a diversified Group that contained strong branded assets with development potential, yet with significant challenges and partially heavy restructuring needs. Penta’s extensive competence and track record in the retail sector enabled an efficient restructuring process and an improved financial stability in the Company. By increasing our shareholding in EM&F, in cooperation with Krockella Limited, we are confident to develop the Group further – in particular Empik and empik.com” – said Thomas von Werner, Investment Director at Penta Investments.
After entering into the investment of EM&F in March 2012 and until the end of 2013 Penta remained a rather passive investor. As the changing economic environment seriously affected operations and financial results of some of EM&F’s business units – from the beginning of 2014 Penta was determined to take a more active role in the Group’s supervision and gradually increased its governing rights. From that time, Penta, together with Eastbridge, initiated and executed a series of remedial initiatives including:
- Complex restructuring of PLN 1.34 billion debt of EM&F Group into a secure and stable financing
- Changing Corporate Governance of EM&F to improve decision making processes and individual supervision of key assets by the shareholders
- Revising, redefining strategies and implementing a full potential plan of key portfolio assets
- Replacing and strengthening key management of EM&F holding and portfolio companies
- Supervising the effective enforcement of non-core assets disposal by EM&F (exit from Fashion segment,disposal of Learning Systems Poland and Optimum Distribution Group)
- Supervising a successful divestment of Smyk with an attractive valuation of the asset at level of PLN 1.06 billion. Such valuation was a consequence of efficient value creation conducted together with the company’s management.
“After debt restructuring, development of individual companies and disposal of non-core assets as well as Smyk Group – the Company has stabilized and will be able to deleverage – this giving EM&F a good basis to develop Empik” – concluded Thomas von Werner, Investment Director at Penta Investments.