Private equity funds expect to grow business through investments and expansion.
The European Bank for Reconstruction and Development (EBRD) is joining the buyout of Allegro Group, the leading online market platform and the largest non-food online retailer in Poland.
The internet company is being taken over by funds advised by private equity funds Cinven, Permira and Mid Europa Partners. The EBRD is joining the consortium with the provision of a PLN 400 million (€92 million equivalent) subordinated second-lien loan and a €24 million equity commitment as part of Mid Europa Partners’ equity syndication process. The total cost of the transaction is US$ 3.2 billion.
The new owners plan to back the growth of Allegro Group through investments in the technological infrastructure and expansion of the categories available for online users of the platform.
The further expansion of the platform will offer opportunities to local Polish businesses to increase their outreach to customers. Small and medium-sized enterprises are expected to benefit from deeper and wider penetration of the Polish online retail market. Companies will be able to market and sell their products to the wider Polish market which keeps growing strongly.
Dirk Werner, EBRD Director, Information and Communication Technologies, said: “This is an important transaction because expanding and strengthening online platforms in Poland facilitates faster development of companies in the country. The internet allows to overcome local divisions and tap into customer markets which were previously either not accessible or only at prohibitive cost. The opening of the marketplace and the establishment of a more level playing field is also expected to serve customers who will benefit from wider choice, better quality and competitive prices.”
Grzegorz Zieliński, EBRD Regional Director for Poland and the Baltics, commented: “This transaction represents the first institutional subordinated second-lien transaction in the Polish debt markets. It is another example of the EBRD’s contribution to the development of the local capital market. We are proud to be at the forefront of innovation and the introduction of new products which aim to serve the local real economy.”
Pawel Padusinski, Partner at Mid Europa, added: "We recognise the strong organic growth opportunities available in the Polish e-commerce and retail sectors. Our investment in Allegro is consistent with our strategy of supporting leading market players with impressive track records in the CEE region. We are enthusiastic about working closely with the management team and our partners from Cinven and Permira in supporting Allegro's further growth. We also recognise the EBRD's contribution and support in this transaction and are grateful not only for the Bank’s financial contribution, but also its expertise and engagement."
The EBRD has been working in Poland since its establishment in 1991 and to date has invested €8.25 billion in 375 projects in the country. The Bank’s activities include all sectors of the Polish economy. In recent years, following demand in the market, the EBRD has been particularly active in the development of the local capital market and in supporting energy efficiency and sustainable sources of energy.