Loan to finance acquisition by Sigur Retail Group and regional expansion
The European Bank for Reconstruction and Development (EBRD) is supporting the acquisition of Intersport ISI d.o.o. by Sigur Retail Group from Mercator d.d. with a €14 million loan, as part of the acquisition transaction of approximately €34.5 million.
The EBRD financing will also be used to fund the regional expansion of the sports retailer. Slovenia’s Abanka will add a €2.5 million term loan and a €5 million working capital loan to the financial package.
Intersport International Corporation (IIC) is franchisor of two specialised sporting goods retailers: Intersport and The Athlete’s Foot. With a presence in 65 countries and sales of €11.3 billion, it is the world’s leading sports retail group. In 1999, IIC signed an exclusive master franchise agreement with Mercator Group, Slovenia’s largest fast-moving consumer goods retail company. This paved the way for the creation of Intersport ISI as a fully owned subsidiary of Mercator Group.
Today, Intersport ISI is market leader in the sports equipment and apparel sector in south-eastern Europe. It operates a network of almost 100 stores in Slovenia, Croatia, Serbia, Bosnia and Herzegovina and Montenegro, with further franchised stores in FYR Macedonia, Kosovo and Albania, and employs nearly 900 staff. In 2015 it recorded €81 million in revenue.
A portion of the loan will be used for the expansion of Intersport’s business in south-eastern Europe where a rollout of up to 50 Intersport stores by 2021, as well as the development of the e-commerce business is planned. E-commerce is seen as an increasingly attractive form of retail with more and more customers making use of the opportunities online shopping offers.
Sigur Retail Group is a limited liability company incorporated in the Republic of Slovenia that is fully owned by Polish Enterprise Fund VII, L.P., a private equity fund managed by Enterprise Investors.
Enterprise Investors is one of the largest private equity firms in central and eastern Europe. Active since 1990, the firm has raised eight funds with total capital exceeding €2 billion. These funds have invested €1.7 billion in 137 companies across a range of sectors and exited 116 companies with total gross proceeds of €2.5 billion.
Sylvia Gansser-Potts, EBRD Managing Director, Central and South Eastern Europe, said: “We welcome this transaction which paves the way for Intersport’s future expansion and growth. Combining the traditional retail approach with an increasing share of online sales is a promising strategy to tap a growing market for high-quality and affordable sporting equipment.”
Claudia Pendred, EBRD Director, Property and Tourism, added: “Our loan will support the further regional expansion of a group which does already have a strong regional footprint. Intersport is a well-known brand and it will further benefit from the new owner’s ambitious plans.”
“Our business plan combines a rollout of stores across the Balkans and dynamic e-commerce expansion. The EBRD’s backing will help facilitate this growth and secure Intersport’s position as indisputable market leader in the region”, said Michał Kędzia, partner at Enterprise Investors responsible for the transaction.
The EBRD has been actively engaged in Slovenia since 1992 and has made €916 million of equity and debt investments. Currently, the EBRD supports 28 projects with €284 million invested.