Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has committed EUR20m on behalf of the Darby Converging Europe Mezzanine Fund to a leveraged buyout of
Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has committed EUR20m on behalf of the Darby Converging Europe Mezzanine Fund to a leveraged buyout of DDSG Cargo Group, a river transportation company based in Vienna.
DDSG and its subsidiaries operate a fleet of more than 250 vessels on the Danube and Rhine rivers, between the Black Sea and the North Sea, and is one of the largest inland waterway shipping companies in central and eastern Europe. The EUR100m buyout of DDSG was sponsored by East Point Holdings, a Serbian-controlled conglomerate active in the trading of grains and other commodities.
Robert D. Graffam, Darby’s senior managing director for Europe, says: ‘We believe that the market for inland waterway shipping on the Danube, currently constrained by inadequate supply, will experience significant expansion in the future.
‘This can be attributed to overall economic growth in central and eastern Europe as well as economic and environmental factors that favor water transportation since it is less expensive and produces less pollution. As a long-standing and significant player in this market, DDSG is well positioned to benefit from these trends.’
Adds EPH president Zoran Drakulic: ‘We are pleased to be initiating this new partnership with Darby. Their financial support and advice were of critical importance in our success in winning the DDSG auction.’
Darby has played a pioneering role in bringing mezzanine finance to emerging market regions, initially Latin America, then to Asia and more recently to central and eastern Europe. DDSG is the fund’s fifth investment, following AS Rigas Piensaimniekes, a Latvian dairy producer, UNO, Turkey’s leading industrial bakery, Ceske Radiokomunikace, a Czech broadcaster and alternative telecommunications provider, and FiberNet Group, which offers cable television, broadband internet and telephony services in countries including Hungary, Bulgaria and Ukraine.
Darby Overseas Investments was founded in 1994 by Nicholas F. Brady, the US Secretary of the Treasury between 1988 and 1993, and in 2003 it became a wholly-owned subsidiary of the parent of Franklin Templeton Investments, based in San Mateo, California, which has 60 years of investment experience and some USD620bn in assets under management at the end of May.
