Arx Equity Partners, a lower mid-market private equity firm focused on Central and Eastern Europe, has completed the EUR102m second close of its third fund, Arx III, on schedule to reac
Arx Equity Partners, a lower mid-market private equity firm focused on Central and Eastern Europe, has completed the EUR102m second close of its third fund, Arx III, on schedule to reach its EUR125m target.
Arx III completed its EUR83m first close in October 2008 from a number of blue chip global financial institutions.
The fund’s core focus continues to be succession-driven buyouts, where Arx Equity has a track record as an investment partner.
Arx says that in recent years Central and Eastern Europ has become an increasingly attractive market for investment and, selectively, continues to offer risk-adjusted value creation opportunities. EU membership has brought financial stability for core CEE countries. The geographic proximity of CEE to the markets of Western Europe, coupled with highly skilled and lower-cost labour markets have contributed to rapid economic growth. In addition, the maturing legal and financial framework has enabled leveraged buyouts to become more established.
Arx III has already made two investments: Kakadu, a Polish pet product retailer; and Lexum, a healthcare business based in the Czech Republic.
The fund will continue focusing on stable, cash-generative mid-market businesses across the Central and Eastern Europ region.
Equity investments in the fund will range between EUR3m and EUR15m, with deal enterprise values ranging between EUR10m and EUR50m.
Arx Equity, formerly known as DBG Eastern Europe, was sponsored by Deutsche Beteiligungs from inception through early 2008. It is now fully independent. Its first two funds, DBG I and DBG II, raised EUR46m and EUR67m in 1997 and 2003 respectively.
Brian Wardrop (pictured), co-managing partner at Arx Equity, says: ‘We are delighted to have achieved the second close of Arx III, on target, and in an extremely difficult fundraising environment. Our ability to attract new investors, while continuing to maintain interest from investors in our earlier funds, shows the strength of our market leading track record, as well as the attractiveness of our investment model in the current environment. Even though Arx III is larger than our previous funds, we remain firmly focused on our target investment size and market, namely established small to mid-sized businesses across CEE.’
