Warburg Pincus agrees $106m Polish PIPE

The New York-headquartered private equity firm will acquire 25% of Eastern European restaurant operator AmRest.

Global private equity firm Warburg Pincus will acquire a PLN307.2 million (€79 million; $105.8 million) minority stake in Warsaw-listed restaurant business AmRest. The cash investment will be used to open more restaurants, rather than change AmRest’s leverage ratios over the long-term, the firm said in a statement.

Warburg Pincus will initially acquire a 24.99 percent stake with an option of increasing this to no more than 33 percent over a one year period.

AmRest’s portfolio of restaurants includes brands such as KFC, Pizza Hut, Burger King and Starbucks, as well as other restaurants, representing an employee base of 18,000. The investment will be used to open 100 restaurants during 2011. Between 60 and 70 new restaurants will be opened this year funded by AmRest’s cash flow and existing debt financing.
According to a spokesman, expansion is largely expected to be in Poland, but the business is also looking at the Czech Republic, Russia, Bulgaria and Hungary.

Warburg Pincus is no stranger to PIPE deals (private investments in public equities): over 20 percent of the private equity firm’s investments have been minority stakes in public companies, with the most recent being in computer manufacturing business Kontron in Germany for $55 million, which bought the private equity firm an 8.8 percent stake in July 2009. 

It also invested $152 million into London-listed food group Premier Foods for a 15.7 percent stake in March 2009.