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Poland’s biggest publicly-traded private equity company MCI Capital SA is hoping that the country’s recent record initial public offering, for online selling platform Allegro.eu SA, will be a boon for the flourishing e-commerce industry.
The fund seeks to sell a stake in online fashion retailer Answear.com, which operates in seven eastern European countries, via an IPO. MCI recently sold data center provider ATM Group SA to a Goldman Sachs-backed fund in a 533 million-zloty ($135 million) deal.
Last month, investors priced Allegro.eu SA at $25 billion, making the nation’s biggest web-based marketplace the most valuable company on the Warsaw bourse as Poles have accelerated their switch to online purchases since the coronavirus outbreak.
“Transactions like Allegro or ATM show that our fears about the pace of growth in the region had been unfounded,” MCI’s founder Tomasz Czechowicz said in an interview.
MCI, which helped fund Allegro’s acquisition by Cinven, Permira and Mid Europa Partners funds in 2017, has invested mostly in digital companies since its inception in 1999. The pandemic has only accelerated the expansion of e-commerce, according to management board member Maciej Kowalski.
“That process can’t be stopped now,” he said in the joint interview.
A merger & acquisitions rush has already begun. Advent International is considering a sale of Polish postal locker provider InPostSA in a transaction that would value the company at more than 2 billion euros ($2.34 billion). Allegro has a right of first refusal to purchase a stake in the operator. KKR Co. and Blackstone are among potential buyers, according to Puls Biznesu newspaper.
Investors are also closely following the sale of a stake in online store EOBuwie by its majority owner CCC SA, the country’s biggest footwear retailer.
To take advantage of investor zest for technology-oriented firms, MCI plans to offload its stake in home-appliances retail platform Morele.net next year by kicking off the process in the first quarter, depending on the success of the Answear IPO.
The fund expects that Gett Inc., an Israel-based ride-sharing service for companies, in which MCI also has a stake, will hold an IPO in the second half of 2021. Gett’s business-to-business profile has mostly shielded it from the fallout from the virus outbreak, as opposed to Uber or Lyft, according to Kowalski.
The next step for MCI is to replenish its business holdings after recent exits. It aims to increase the value of each purchase to as much as 100 million euros and sees one or two deals next year, and five to six in total over the next 36 months.
We’re relaxed about our transactions,” Czechowicz said. “The size of our investments and the level of competition makes it a good moment to buy.”
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