Enterprise Investors makes 10x return from IPO(4)

Central and eastern European buyout firm Enterprise Investors has made a ten times return on its partial exit from financial services company Magellan.

Enterprise Investors has floated financial services company Magellan on the Warsaw Stock Exchange making a ten times return on its original investment, raising $13.5 million (€9.6 million) from the 20 percent stake it sold on the public markets, according to a company statement.

Magellan also raised nearly $7 million to finance the growth of its loan portfolio. The buyout firm sold 1.3 million shares at PLN42 per share. The stock debuted 7 percent above the offer price.

The buyout firm will also keep 76 percent of Magellan's capital, while four percent is retained by management. The float was three times oversubscribed.

Magellan provides financial services to medical institutions. These services include financing of receivables, refinancing of liabilities, loans and guarantees. At the end of the first half of 2007 the value of the company's portfolio of assets grew 73 percent compared to the same period last year, while net profit reached PLN6.4 million representing an increase of 27 percent.

Enterprise Investors’ fourth fund invested in Magellan in 2003 through a capital increase, gradually taking a 100 percent stake in the company. Terms were undisclosed.

Magellan's IPO is the 25th initial public offering of an Enterprise Investor company, taking the firm's proceeds from public market exits to €566 million to date, equivalent to 45 percent of the buyout firm’s realisations.

The rapidly growing central and eastern European economies have only been moderately affected by the recent liquidity problems in the worldwide banking sector, according to Austrian bank Raiffeisen Zentralbank Österreich.

However, the bank said the problems in the global economy would still slow the pace of growth in the region. “It is clear that the pace of economic growth slowed somewhat in the second quarter, and we are expecting to see considerably weaker GDP growth rates in 2008. Only Romania and Hungary should see growth rates increase further,” it said.