Central and Eastern Europe private equity fund Innova Capital has sold its 27 per cent stake in Wirtualna Polska Holding for PLN50 per share.
In 2014 the Innova Capital fund financed the acquisition of Wirtualna Polska from Orange Polska and its merger with the o2 Group.
The purpose of the PLN375 million transaction was to consolidate the e-market in Poland and introduce the group into the e-commerce market segment.
In just a dozen or so months the company underwent a dynamic integration process, strategy overhaul and rebranding. These initiatives gave an immediate boost to the financial performance: a 2.5x increase in EBITDA and four-fold increase in market value.
Fifteen months after Innova’s investment, Wirtualna Polska Holding became listed on the Warsaw Stock Exchange and the company’s present capitalisation is over PLN 1.5 billion, with the share price rising by nearly 70 per cent following the IPO.
Innova generated an internal rate of return (IRR) of over 60 per cent.
“Our investment in Wirtualna Polska was very successful: in a relatively short time we have created a leader of the Polish e-market, in cooperation with the excellent team of managers. The new strategy of development and pursuing it consistently has also translated to an above-average rate of return on the investment. This is an excellent example of a Platform+ investment, assuming acquisition of two companies and consolidating them on purchase, leveraging the income and cost synergies effectively and implementing a new management structure,” says Magdalena Magnuszewska, partner at Innova Capital.
“The Innova Capital has undoubtedly placed much confidence in us and financed ambitious plans of the group. I can’t remember any other transaction where a four times smaller company acquires its bigger rival. Then, in short of two years, it consolidates the market by acquiring 14 entities, successfully enters the stock exchange and moves nearly a half of its revenues from the market it has been active on for 20 years to entirely new areas. All this while constantly improving the results and increasing its market value by a few times. This is only possible in Poland. In Wirtualna Polska,” says Jacek Świderski, president of the board of Wirtualna Polska Holding.
Jacek Świderski, Michał Brański and Krzysztof Sierota, entrepreneurs with a majority stake in Wirtualna Polska, were involved in the repurchase of shares from Innova Capital and now have over 55 per cent votes at the general meeting of shareholders. All remaining shares were sold to public institutional investors in the accelerated book building (ABB) process, which was closed today.
