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DBG Eastern Europe completes first transaction from new fund

DBG Eastern Europe has completed its first investment from its newly established E67m Central and Eastern Europe-focused private equity fund. DBG Eastern Europe II has backed the management buy-out of Ergis, one of Poland's leading plastics producers, from several national investment funds.

DBG has also tabled an offer to acquire the remaining shares from the Polish State Treasury.

‘I am confident that the buy-out structured by DBG and the managers will form a strong basis for long term development of Ergis,' said Tadeusz Nowicki, CEO at Ergis. ‘The transaction structure will be an example to follow by other Polish mid-sized industrial companies.'

The management buy-out of Ergis is the third time DBG has acquired a company in conjunction with a management team. The firm has previously acquired Prague-based ISP Czech On Line and Budapest-based logistics company Hungarocamion.

‘We believe that management buy-outs of industrial companies will be interesting for private equity funds in the next few years, especially in Poland,' said Jacek Korpala, partner with DBG Eastern Europe. ‘Combining the experience of seasoned private equity investors with that of motivated management teams is, in our experience, a recipe for success.'

‘In this instance we also seek to leverage off accession to the European Union and from recent intensive modernisation programmes in the region. In addition, the increased availability of acquisition finance throughout the region should facilitate an increased volume of leveraged acquisitions,' Korpala continued.

DBG Eastern Europe currently manages over E100m. DBG's family of funds are organised to make equity investments in Central and Eastern European countries, with an anchor presence in the Czech Republic, Hungary and Poland. The firm also makes investments in Bulgaria, Croatia, Estonia, Latvia, Lithuania, Romania, Serbia, Slovakia and Slovenia. DBG focuses on later-stage investments such as expansion financing, management buy-outs and buy-ins and industry consolidation transactions.

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