"Private equity group Penta, which is active mainly in Slovakia and the Czech Republic, is to buy a 49% stake in Hungary's second-largest meat processor Debreceni Hús Zrt. (DH), the firm's Chairman-CEO, Gyula Román told business daily Világgazdaság on Wednesday.The contract has already been signed, but payment has not been effectuated yet. The deal is to make DH part of a major Central European meat processing holding.
Penta set out to acquire meat companies also in Slovakia, the Czech Republic and Poland. The series of deals would create a giant group in the region that would open new markets for DH and would also bring about considerable growth in hog sales, packaging and marketing.
Economy of sale and concentration is shifting into focus in the region as competition in becoming fiercer in Europe. The holding under creation could generate revenues of around HUF 120-130 bn for DH, three times as big as its current turnover.
Debreceni Hús has annual revenues of HUF 42-43 bn, which makes it the second-largest player on the Hungarian meat market behind Pick Szeged (HUF 60 bn), an interest of OTP Bank chief Sándor Csányi.
In December of 2006, Penta announced its entry into PM Zbrojniky, the fourth-largest meat processing company in Slovakia, and following the approval of the antitrust office, it became its one 100% shareholder in February 2007. In March, Penta began business restructuring at the company and its total investments in PM Zbrojníky reached around SKK 230 million already.
In mid-February this year, Penta announced the acquisition of meat processor and trader Mecom Trade. Mecom Group is Slovakia's largest meat producer and trader with a 28% market share, over 1,500 employees and sales of SKK 3.946 bn in 2007. The group exports its products primarily to Bohemia, Poland, and Hungary and its exports make up about 12.7 % of all sales.
Penta Investments is a Slovak-Czech private equity group, founded in 1994. It operates chiefly in Central Europe. It focuses on acquisitions of large and medium-sized companies, LBOs, LBIs, restructuring projects and, since 2005, also on real estate.
Penta manages funds for its five owners. Its key investment markets are currently Slovakia, the Czech Republic and Poland. It has 70 front office employees and 130 core back office employees in five branches in Bratislava, Cyprus, Moscow, Prague and Warsaw. About 20,000 people work in the companies it has in its portfolio. It develops activities in the power sector, engineering industry, health sector, civil aviation, retail, real estate, telecommunications, entertaining industry and private banking."
Source: Portfolio Online Financial Journal
24.04.2008