Mid Europa makes first play in Croatia

The Central and Eastern Europe-focused private equity firm has made its first investment in Croatia, acquiring the aluminate cement business arm of Germany’s HeidelbergCement Group.

London-based Central and Eastern Europe buyout firm Mid Europa Partners has agreed to buy the Croatia-based calcium aluminate cement business division of Germany-based HeidelbergCement Group.

Knorr: first investment in Croatia for Mid Europa

Mid Europa, formerly known as EMP Europe until it became independent in June 2005, paid an undisclosed sum to acquire Heidelberger Calcium Aluminates. The transaction includes HeidelbergCement Group’s 92.4 percent stake in Istra Cement, a production facility in Croatia, as well as two trading entities in Germany and the US.
Zagrebacka Banka, part of UniCredito Group, provided debt financing for the transaction, which is expected to close by the end of June.
Robert Knorr, Mid Europa director who led the transaction, told PEO that Heidelberg Calcium Aluminates is the firm’s first investment in Croatia, having already made investments in neighbouring Slovenia, such as cable TV and internet company Telemach. Mid Europa invested in Telemach in April 2000 and sold the business in December 2004 to UnitedGlobalCom.

“Heidelberger was attractive for a number of reasons, including entering a new sector,” said Knorr. “We had been looking at the cement sector for some time before we became interested in specialty cement, which is closely connected to the building chemistry and materials arena, so it opens up opportunities in the broader sector.”
Heidelberger Calcium Aluminates is the third transaction from Mid Europa’s Emerging Europe Convergence Fund II, which closed on €650 million ($820 million) in January of this year. In December, the vehicle made its debut investment, acquiring Polish media and communications company Aster City Cable from Lion Capital for PLN1.6 billion (€394 million; $500 million). In February, the firm acquired US-headquartered surface preparation specialist, Wheelabrator Group, for an undisclosed sum.
Knorr said that Emerging Europe Convergence Fund II is now approximately 25 percent invested.