Czech/Slovak equity group Penta to buy German, Polish firms

Cash-rich Penta Investments plans to splash out hundreds of millions of euros to buy an engineering firm and retailer

Penta Investments is in final negotiations to buy a large engineering firm in Germany, with the Czech/Slovak private equity group looking to invest an initial €100 million to €200 million, Hospodářské noviny reports. The cash-rich group is also looking to acquire a Polish retail company.

“We don’t want to make the results of the entire holding public just now, but the cumulative EBITDA profit for all the companies in our portfolio will come to around Kč 5 billion,” said Penta co-owner Marek Dospiva, who heads the Czech operations, as cited by the business daily.

That would represent a sizeable improvement on 2010 results, when Penta’s net profit reached nearly Kč 1.3 billion. The jump in 2011 revenue comes from one-offs, namely the equity group’s sale of three major businesses last year: the Polish express grocery chain Žabka; the Polish-Czech wire producer Drumet; and TES Vsetin, a Czech designer and manufacturer of electric machines and technology.

Now, Penta — already among the biggest players on the Czech, Slovak and Polish markets — is looking for new investments in Germany, Dospiva said, starting with the investment into the engineering firm, which he declined to name. A deal of comparable size (€100 million to €200 million) is also on the horizon in Poland. “In that case it concerns the acquisition of a retail firm,” Dospiva told Hospodářské noviny.

Established in 1994, Penta is now active in more than 10 European countries and has offices in Prague, Bratislava, Warsaw, Limassol and Amsterdam. It has investments in the retail, health care, aerospace industry, mechanical engineering, utility, entertainment and banking sectors.

Its holdings include Prague-listed Fortuna, the largest operator of fixed-odds betting in Central and Eastern Europe, as measured by total amounts staked at retail points of sale.