Krokus books 3.5x on paraffins producer

The Polish firm has sold its remaining stake in Polwax through the Warsaw Stock Exchange.

Polish private equity house Krokus PE has exited its remaining stake in Polish industrial paraffins producer Polwax through a share sale to institutional investors on the Warsaw Stock Exchange, according to a statement from the firm.

The sale secured investors in the €100 million Nova Polonia II a total net cash return of 3.5x and an internal rate of return of more than 45 percent on its original investment of €7.7 million in 2012.

Polwax produces refined paraffins and paraffin wax, offering a range of specialised products used in various industries, such as fertilisers, rubber, food, wood processing and precision casting.

Under Krokus’s ownership, Polwax boosted its research and development capabilities, acquired two laboratories, and invested into new environmentally friendly industrial facilities.

Krokus sold half of its original 65 percent stake in 2014 through a listing on the Warsaw Stock Exchange. In 2015 the company recorded revenues and EBITDA of €66 million and €8 million respectively.

“Since the MBO, backed by Krokus in 2012, Polwax has transformed itself from a low-end producer into a modern, entrepreneurial, self-standing corporation producing innovative specialized proprietary paraffin derivatives for diverse industries. This result was driven by the company’s capable management team and the implementation of a clear growth strategy,” Witold Radwanski, managing partner at Krokus, said in the statement.

“The Fund’s successful divestment also shows that the Polish Stock Exchange continues to be a viable exit route for high-grade private equity-backed investee companies.”

The Polish economy, unlike some of its neighbours in Central Europe, has been resilient. Its GDP has continued to grow post-crisis and even in the shadow of Russia’s recession and the conflict in Ukraine, rose 3.65 percent in 2015, according to the World Bank. Growth is forecast at 3.7 percent this year, the highest forecast in Europe and Central Asia.