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ARX Equity Partners completes Telekarma acquisition

ARX Equity Partners, the Central and Eastern Europe‐focused private equity investment firm, has acquired a controlling stake in online pet-retailer Telekarma. Following the deal, ARX will focus on the merger of Telekarma with existing portfolio company Kakadu, a Polish pet products retail chain.

ARX originally acquired Kakadu in March 2009, taking a controlling stake in the business. At the time of the deal, the company was operating 25 stores located in shopping centres and at retail parks in large Polish cities. Since then, the chain has expanded to 34 stores, and plans to open another five outlets during the course of 2011.

The merger of Telekarma and Kakadu will create a business with great potential to grow further, combining Kakadu’s market leading position in the pet products retail space in Poland with Telekarma’s online presence and expertise. Combined, the businesses have more than doubled revenues over the past three years to more than PLN100 million (EUR25 million), and this year expect to exceed PLN120 million in revenues.

ARX and the management’s primary goals going forward are to strengthen the company’s market leadership by implementing operating improvements, the roll out of new stores and add-°©‐on acquisitions. Last year, ARX brought in new members to the management team, including a new CEO (Andrzej Uryga, ex-COO of Drogerie Natura, a leading Polish cosmetics retail chain). This year the business will open a new central warehouse facility and implement central ordering capabilities.

The acquisition is the fourth add-on acquisition ARX has completed within its portfolio since the start of 2010. Other build‐up programmes include ophthalmology clinic chain Lexum, which added Intermedica in January last year, and construction materials producer KVK, which added Penepol and KVPA Dehtochema earlier this year.

Jacek Korpala (pictured), Co-Managing Partner at ARX, says: “We are delighted to have completed the acquisition of Telekarma, which will provide significant operational synergies with the Kakadu business and puts the business at the forefront of the pet products retail market in Poland, creating the ideal platform for further growth. This shows again how ARX is able to pursue build-up strategies to achieve outperformance in its portfolio.”

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