A consortium comprised of investment funds DBG and Polish Enterprise Fund IV may take over 50% in Flanco by yearend, under a transaction estimated at $20-25 million, according to sources close to negotiations. Flanco is Romania's largest retailer of household appliances.
DBG, an investment fund owned by Deutsche Bank Group, and Polish Enterprise Fund are in talks over the purchase of the Flanco stakes held by another investment fund - Danube Fund (33%) and the company's founder - Florin Andronescu.
Oresa Ventures, the Swedish investment fund owning 47% in Flanco, is not planning to sell yet, waiting for the moment the company becomes big enough to be bought by strategic investors.
The investment funds' officials would not comment on information about the negotiations.
There have been negotiations for selling Flanco in the past years, but the interest of foreign investors has become more concrete lately.
The DBG-Polish Enterprise Fund consortium, which is very likely to take over 50% in Flanco stock, has been formed recently, after the current Flanco shareholders had already had talks with several international or regional investment funds. The sale of 50% in Flanco shares could be one of this year's biggest deals on the Romanian market, as the company forecasts $100m sales in 2003.
Flanco is estimated to be worth $45-50 million, according to the quoted sources. Oresa Ventures and Danube Fund entered Flanco six years ago, to support the company's development and then sell it to a strategic investor. The company is not big enough to be sold to strategic investors yet, but large European funds have emerged on the market, willing to buy in order to sustain Flanco's growth and then sell the company to the big groups. Flanco would be DBG's first investment on the Romanian market. Polish Enterprise Fund IV, one of the largest regional investment funds (with $220m capitalisation) has already invested in Romania, as it holds a stake in Orange.
Altex and Domo, Flanco's main competitors, have also caught the eye of investment funds. Both companies are now controlled by Romanian businessmen.
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