EI makes second investment in Slovakia

Enterprise Investors has purchased a 47.4 percent stake in Slovakian white and brown goods retailer NAY for €17.5 million ($21 million).

The Polish-headquartered private equity firm made the investment through its Polish Enterprise Fund V (PEF V), which closed on €300 million in June 2004.

[NAY] has a strong market position in Slovakia, which will be used as a base to develop in other countries in the region. Robert Manz, partner, Enterprise Investors

The oversubscribed fund, which launched in January 2004, saw commitments from Alpinvest, CalPERS, Bank Austria Creditanstalt, European Bank for Reconstruction and Development (EBRD), European Investment Fund (EIF), MetLife, Partners Group, and a number of other financial institutions from Europe and the US.

Established in 1991, Bratislava-based NAY operates a network of 13 stores in 11 cities under the Elektrodom and NAY Elektrodom trade names.

According to a statement issued by Enterprise Investors (EI), NAY is the market leader in Slovakia for white and brown goods retailing, with an estimated market share of 18 percent. In 2004, NAY generated revenues of over €75 million.

The NAY transaction is EI’s second investment in Slovakia following its 2001 acquisition of a stake in mobile operator Orange Slovensko. The firm was sold to France Telecom in April 2005 for $523 million, generating a 4x investment multiple for EI-managed funds, The Polish Enterprise Fund and Polish Enterprise Fund IV.

“[NAY] has a strong market position in Slovakia, which will be used as a base to develop in other countries in the region,” said Robert Manz, partner at Enterprise Investors responsible for the investment, in a release.

Enterprise Investors, which manages funds with capital exceeding $1.1 billion (€907 million), has invested in Central and Eastern Europe since 1990. The funds have invested $955 million in 100 companies in Poland, the Czech Republic, Romania, Bulgaria and Slovakia, and have made 77 exits to date.