DBG Eastern Europe, the private equity house set up with backing from German private equity firm Deutsche Beteiligungs in 1996, has completed its first deal since holding a first close of its most recent fund, DBG Eastern Europe II LP.
Alongside management, DBG has provided the equity for a management buyout of Ergis, Polish manufacturer of plastics. Investing via holding vehicle Finergis, DBG has acquired Ergis shares from several Polish National Investment Funds and placed an offer to buy the remaining shares from the Polish State Treasury.
The size of the transaction has not been disclosed, although the fund is targeting equity investments of between E5m and E12m per company. In a statement, DBG Eastern Europe said that Ergis had annual sales of E50m. Debt financing for the transaction was provided by BRE.
“I am confident that the buyout structured by DBG and the managers will form a strong basis for long term development of Ergis,” said Tadeusz Nowicki, the CEO of Ergis. “The transaction structure will be an example to follow by other Polish mid-sized industrial companies.”
The management buyout of Ergis is DBG’s third such deal in the region following the buyout of Czech On Line, a Prague-based ISP, and Hungarocamion, a trucking and logistics company based in Budapest.
DBG Eastern Europe completed a first closing at E67.2m for its second fund in January, with backing from Deutsche Bank, EBRD, Mitsubishi Corporation and DEG. DBG Eastern Europe II LP is the successor fund to the DBG Osteuropa Fund, which was launched in 1997 and has since returned nearly four times its original investor commitments.
DBG Eastern Europe II will focus on later stage investments such as expansion financing, management buyouts and buy-ins and industry consolidation transactions.