Enterprise Investors announces investment in Zelmer

Zelmer is Poland’s oldest and largest manufacturer of small electrical appliances such as vacuum cleaners and kitchen appliances, with a market share reaching 50%. Zelmer is one of Poland’s most valuable brands; it is very well recognized and associated with good quality at a favorable price. Zelmer is also a financially sound, growing and profitable company. The company’s management forecasts that sales will reach $80 million in 2004 and that net profit will exceed $4 million. Export is expected to account for 33% of 2004 sales.

“Thanks to the effort of the management team and a successful restructuring of Zelmer, the financial results of the company have improved significantly in the last three years. Zelmer has, in our opinion, large growth potential, both through entering new domestic market segments and launching new products as well as through further expansion in foreign markets. We want to participate in the next stage of Zelmer’s development and to support it as stable financial investors. Therefore we have declared that we will not sell our stake for the next three years,” commented Jacek Siwicki, managing partner of Enterprise Investors, who is responsible for the investment. “We believe that the experience we gained during the privatization of Polar will be valuable for Zelmer’s future development,” Mr. Siwicki added.

Enterprise Investors (EI) is the largest private equity firm in Central Europe. Active since 1990, it is the investment manager for five funds, with $1.1 billion under management. The funds managed by Enterprise Investors have invested and committed more than $800 million in almost 100 businesses in Poland and other Central European countries. The firm has privatized 18 Polish companies and has been involved in 19 IPOs. One of EI’s main competitive advantages is its reputation for following best practice in corporate governance.

From 1997 to 1999 the funds managed by EI completed the privatization of Polar, Poland’s largest white goods manufacturer. With the support of Polar’s management team EI modernized the company, improved and expanded Polar’s product line, launched new products, and optimized the company’s operations. The price of Polar’s shares increased from PLN 11 to PLN 25 per share in the course of EI’s investment.