Management buy out of Ergis

DBG Eastern Europe’s second Central and Eastern European – focused private equity fund has completed its first investment.

DBG with Polish managers Tadeusz Nowicki and Marek Górski, through a holding vehicle Finergis, have acquired Ergis S.A. shares from several National Investment Funds and placed an offer to buy the remaining shares from the Polish State Treasury.

Ergis S.A. that had participated in the mass privatization program since 1994 is the only Polish manufacturer of pharmaceutical foils and of wallcoverings and is the leading producer of PVC isolation foils, packaging and office foils and of construction panels in Eastern Central Europe. Following several mergers, take-overs and development investments that took place in the years 1998-2001 sales of Ergis Group have more than doubled to reach over € 50 M in the current year.

DBG Eastern Europe II LP is the successor fund to the highly successful DBG Osteuropa-Holding GmbH that had been investing in Poland, Czech Republic, Slovakia and in Hungary from 1997.

DBG Eastern Europe is focused on later stage investments. Ergis follows DBG’s earlier investments financing management buy outs of Czech on Line and Hungarocamion.

„We believe that management buy outs of Polish industrial companies will be interesting for private equity funds in the next few years. Co-operation with Ergis management will allow us to benefit from expected development of the Company in result of Polish accession to European Union and from its intensive modernization program implemented in the last few years.” said Jacek Korpala, managing director of DBG Eastern Europe.

„I am confident that the buy out worked out by DBG and the managers will be a strong basis for long term development of the Ergis Group and will be an example to follow by other Polish middle size industrial groups.” said Tadeusz Nowicki, the CEO of Ergis S.A.