Highlander Partners has agreed to buy shares of the Warsaw-listed cardboard packaging manufacturer Druk-Pak from Penton Partners as an add-on to the firm’s portfolio company Akomex. The deal requires the approval of the Polish Antimonopoly Office.
Highlander Partners, through its portfolio company Akomex, has signed a conditional agreement under which it intends to acquire shares of the Warsaw listed Druk-Pak from Penton Partners. The takeover of Druk-Pak shares by Highlander Partners depends on the approval of the Polish Antimonopoly Office (UOKiK) and the fulfillment of suspensive conditions in the agreement.
The potential acquisition will result in creating one of the largest consumer packaging companies in Poland with an even larger potential to effectively compete in the EU market. This add-on investment of the Highlander Partners managed fund in Akomex will also be used to finance the construction of a new manufacturing facility, to commence immediately after the closing of the transaction, as well as adding machinery for the two existing plants of Druk-Pak and Akomex. Total revenues of both companies in 2013 are expected to exceed 130 million PLN ($41 million / €31 million).
“Our intention is to strengthen the capital base and utilize the potential of our combined businesses to grow in Europe while maintaining our customized service philosophy,” said Artur Łakomiec, operating partner at Highlander Partners. “We are pleased with the development of Akomex, the value of which we and the minority shareholder have been successfully building for more than three years. But new market challenges lie ahead requiring new investment and a strong industry partner. Highlander Partners will continue to look for additional strategic acquisitions,” Artur Łakomiec added.
Druk-Pak is one of the largest manufacturers of cardboard packaging in Poland. The company has been operating for 40 years and is based in Aleksandrów Kujawski in Northern Poland. The firm focuses on packaging production for Polish as well as international pharmaceutical companies. The company’s good manufacturing practice enabled the enterprise to become the first in the Polish printing industry certified for ISO 15378. Druk-Pak keeps investing in the latest equipment and technology, the highest quality and environmental protection; it also considered the construction of a new production facility. The firm has been listed on NewConnect, the alternative market of the Warsaw Stock Exchange, since 2010. Read more: www.drukpak.pl
“In recent years Druk-Pak has achieved considerable success in the Polish and European markets for pharmaceutical packaging. Acting in a group with Akomex perfectly complements our competences and enriches our offer. Our existing customers, including large pharmaceutical corporations, will benefit from the modern production facility in the new plant, greater security of supply from two locations as well as enhanced flexibility,” said Paweł Kalbarczyk, CEO of Druk-Pak.
Founded in 1993 Akomex supplies high-quality packaging products made of corrugated and solid fiberboard to the food industry. The company is located in Starogard Gdański on the Polish coast. Thanks to the popularity of Polish food in Western Europe Akomex products have successfully entered the German, French and Scandinavian markets. Three and a half years ago, the private equity fund managed by Highlander Partners, invested in Akomex as it appreciated the dynamic growth of the firm and the potential of the market in which it operates. The first tranche of the fund’s investment was used for the construction of a plant and the purchase of modern machinery. Read more: www.akomex.pl
“Thanks to the first tranche of the investment by Highlander Partners in our company, we have been able to significantly strengthen our capacity. Today we not only have loyal clients, many of whom are international, but also modern machinery at our disposal. We are proud to say our products can be found in supermarkets across Europe. The merger with Druk-Pak will afford our company to make a generational change in the organizational structure and become even more competitive in the whole of Europe,” said Sebastian Śliwa, Akomex CEO and shareholder.
The majority owner of Druk-Pak, an investment fund managed by Penton Partners, since 2006, will sell out its shares if Akomex invites all Druk-Pak shareholders to sell on the same basis.
“I am pleased that the achievements and the potential of Druk-Pak, a company we, its management and employees all together worked hard to develop, gained recognition of a reliable partner and a growth-oriented investor. We calmly pass the company to the new shareholders and wish them good luck for the future,” said Marek Chłopek, partner of Penton Partners and CEO of Penton TFI.
About Highlander Partners
Highlander Partners is a Dallas-based (Texas, USA) private equity firm specializing in long-term investments in middle-market businesses. It was founded 10 years ago by its American principals and has $500 million for direct investments in companies operating in North America and Central Europe. Highlander Partners has a flexible and rapid decision making process free from many restrictions of typical institutional investors. The firm consistently invests in companies operating in targeted industries (manufacturing, services, and others) that allow the partners of the firm to leverage their significant operating and investing experience. Highlander Partners opened its Central European office in September 2008 to capitalize on the vibrant growth of entrepreneurship in the region by bringing its investment philosophy and experience to private equity projects in Poland and other new member states of the European Union. The local team of Highlander Partners has many years of experience in value creation in the region. Currently, Highlander Partners’ equity investments in Poland are: Akomex (packaging products manufacturing), MEDI-System (healthcare services), ProService (services for the financial sector) and ZREW Transformatory (energy sector). Read more: www.highlander-partners.com/pl
About Penton Partners
Penton Partners is an independent private equity management group focusing on investments in small or medium-sized private enterprises in Poland. Penton’s investments include private companies, those privatized by the Polish State Treasury as well as employee stock ownership corporations. Since 2009 Penton Partners, through Penton TFI (Penton Investment Fund Company), has been offering the management of regulated closed-end funds under the approval of the Polish Securities Commission. Read more: www.pentonpartners.com
Gessel was acting as a legal advisor to Highlander Partners in this transaction. DMS was acting as a legal advisor to Penton Partners. Holon Consultants was Druk-Pak’s financial advisor.