Arx Equity Partners has bought a controlling stake in Polish pet store chain Kakadu for an undisclosed amount.
Kakadu sells luxury pet products, food and accessories across 25 outlets in major cities in Eastern Europe. Arx plans to implement operational improvements and roll out new stores and add-on acquisitions, it said.
The acquisition is the debut investment for Arx’s third Central and Eastern Europe- lower mid-market-focused fund, Arx CEE III, which held a first close on €83 million last October. The fund is targeting a final close on €125 million, which is nearly twice the size of its €67 million predecessor, closed in 2004.
Last January Arx, formerly DBG Eastern Europe, spun-out from German private equity firm Deutsche Beteiligungs which helped establish it in 1996.
“The decision to spin-out corresponded with the commencement of fundraising for the third fund. Our sponsor Deutsche Beteiligungs was moving its focus toward Germany and we both decided that as they were not investing in the third fund that it would be good for us to become independant,” Jacek Korpala, a managing partner at Arx, said in an interview.
Kakadu is not the firm’s first foray into the Polish retail market, as in 2006 it acquired a Polish chain of children’s clothing stores Komex operating under the brand name 5.10.15.
The firm’s recent investments include rope manufacturer Lanex and climbing equipment retailer Singing Rock, both based in the Czech Republic. Last year the firm recorded a realisation of 3 times its investment and a 58 percent internal rate of return upon the sale of Slovenian gasket maker Donit Tesnit, which it had acquired in 2006.
Arx now has offices in Bucharest, Budapest, Prague and Warsaw. Managing partners Korpala and Brian Wardrop lead the eight-person strong investment team.