BPEP exits Romanian food company

The firm’s central European arm has exited all but two divisions of Romania’s leading edible oils manufacturer to Norwegian food company Orkla.

The Baring Central European Fund (BCEF) has sold Topway Foods International, a Romanian producer of margarine, ketchup, mustard and condiments to Orkla Foods, a subsidiary of the Norwegian diversified multinational, Orkla AS.   

Financial terms of the acquisition have not been disclosed but the firm said the deal has provided BPEP with an ‘attractive return’ on the original $9.5m investment made in 1999, which has since increased to a total investment of $13m.

BCEF's managing partner, Gyuri Karady, commented: 'Since we invested in Topway in 1999, the group has successfully grown its brands, becoming market leader in several key product categories. In addition, the two remaining business units are leaders in their respective market segments and as such are attractive acquisition candidates for strategic investors seeking entry into Romania.” 

BCEF originally invested in Topway Industries SA, Topway Foods International's parent company, in August 1999. The investment financed the group's acquisition and modernization of edible oil and margarine production facilities and the launch of several new products, including ketchup, mustard and other sauces. The company generates annual operating revenues of approximately $19m and has 400 employees.

The sale of Topway Foods International is the firm's first exit from the Topway group acquired in 1999. BPEP hopes to complete the sale of the remaining two companies within the Topway portfolio in 2003.

According to Karady, the Topway exit is the first of two planned for BCEF in 2002. The central European team typically looks to invest in large minority or majority stakes with valuations in the region of E7m to E15m.