Covalact, one of the leading dairy producers on the domestic market, which registered turnover worth over 15 million euros last year, sold 70% of the company's shares to the US-based investment fund SigmaBleyzer for around 7 million euros, according to market sources.
This is the first investment for the American fund on the Romanian market.
"Lately, we have seen growth of no more than 5-10% and, because of a lack of capital, we could not expand onto the market. In order to increase our market share and make new investments, we decided to sell our majority stake to an investment fund," Ioan Balan, general manager and majority shareholder of the company told ZF. The transaction was also confirmed by representatives of the American investment fund SigmaBleyzer Southeast European Fund IV (SBF IV) in Romania. By February this year, the fund, which was launched in August 2005, had attracted investments worth 250 million euros, with 20% of the investments being held by the European Bank for Reconstruction and Development (EBRD).
"We acquired the majority stake in Covalact because the dairy industry is poised for constant growth in Romania, and also because it is one of the sectors the fund is interested in," stated Radu Bugica, country manager of SigmaBleyzer in Romania.
Neither of the companies wished to reveal the value of the transaction or of the stake acquired, but, according to market sources, the Covasna-based dairy producer is valued at approximately 10 million euros. Since the same sources claim SigmaBleyzer currently holds 70% of the shares of the Covasna-based producer, the transaction was put at approximately 7 million euros.
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