Record transaction in Romania: Profi chain has been sold for EUR 533 M

UK private equity fund Mid Europa Partners has signed an agreement to acquire 100 percent of Profi Rom Food shares, the largest supermarket chain in Romania, from Polish Enterprise Fund VI (EI), a press release informs on Wednesday.

This is the largest deal ever completed by a private equity firm in Romania and the largest retail deal in the country’s history, meaning EUR 533 million. The transaction is subject to anti-trust clearance and is expected to close in Q1 2017.

“Profi is the fastest growing food retail operator in Romania and is ideally positioned to build on its leadership position to deliver organic growth in the future. We have closely followed Profi’s development over the last few years and are excited to have the opportunity to work together with management to continue Profi’s success story. The acquisition of Profi underscores our commitment to Romania and is the second landmark transaction in the country after our acquisition of Regina Maria last year,” Nikolaus Bethlen, Partner of Mid Europa commented.

The company management will remain the same with Daniel Cristea as CEO. He will be responsible for retailer’s ongoing expansion of aiming to achieve a total of 1,000 stores. Currently, Profi plans to open the store number 500.

“Profi has a proven track record of gaining new customers by offering fresh products in modern proximity stores around the country. The company is in excellent shape and has great potential to grow in the years to come, as Romania has many more areas to take modern retail to. We look forward to working with the new owners and believe that the Company will greatly benefit from Mid Europa’s success in food retail in Poland with their Zabka investment,” Daniel Cirstea, CEO of Profi Rom Food said.

In turn, Enterprise Investors officials say they will continue to invest in Romania, including another retail project.

”We have money to invest in Romania. We are open for new projects in retail,” said Sebastian Krol, EI partner.

Polish EI paid EUR 66 million in 2009 for 65 Profi stores chain, ie 100 percent of the shares of Profi Rom Food, Albinuta Shops and DT Logistic.

Profi is a modern retail network with the widest geographical spread in Romania, having a strong presence in almost 250 cities, smaller towns and villages. Profi operates two store formats in urban areas, Standard and City, and recently developed Loco, a successful format for rural parts of the country.

According to company’s estimations, Profi Rom Food will end this year with sales of almost EUR 800 million.  It is the first retail chain in Romania to have created a brand dedicated to rural customers and aimed at reaching regions previously unavailable to modern retail. Today Profi is one of the top employers in Romania, with nearly 11,000 employees.