EI gets reduced stake in Zelmer

Enterprise Investors has acquired a 25 percent stake in the Polish consumer appliance company for €12.5m, but has been refused a further 25 percent stake by the Polish SEC.

Warsaw-headquartered Enterprise Investors has acquired a 25 percent stake in Zelmer, a Polish manufacturer of consumer appliances for €12.5 million ($16.3 million) in a state-run IPO.

Polish Enterprise Fund V (PEF V) acquired the stake from the Polish State Treasury during the company’s IPO on the Warsaw Stock Exchange.

The firm acquired its stake from the tranche of shares designated for financial investors. It wanted to increase its holding to 49.99 percent through an offer for shares under the large investor tranche, according to a report from the Polish News Bulletin.

However, the Securities and Exchange Commission refused the approval required to hold more than 33 percent of shareholder votes at a general meeting, according to the report.

Zelmer manufactures small electrical appliances, including vacuum cleaners and kitchen aids. The company forecasts that sales will total $80 million in 2004, yielding a net profit of $4 million.

Enterprise Investors has previous experience in the sector, having previously privatised Polar, Poland’s largest white goods manufacturer. Commenting on the transaction, Enterprise managing partner Jacek Siwicki said in a statement: “We want to participate in the next stage of Zelmer’s development and to influence it as stable financial investors. Therefore we have declared that we will not sell our stake for the next three years. We believe that the experience we gained during the privatisation of Polar will be valuable for Zelmer’s future development.”

Enterprise Investors currently has $1.1 billion under management in five funds. The latest fund, PEF V closed on €300 million in June 2004.