Enterprise Investors buys out Harper Hygienics

Enterprise Investors pioneered buyouts in Poland, completing the first large buyouts without leverage (Agros Nova – $27 million, Kruk Systemy Inkaso – $12 million). It also managed one of the region’s first LBOs (Nomi – $12 million) and the first MBO on the Warsaw Stock Exchange (Stomil Sanok – $30 million). EI is now Poland’s leading buyout specialist.

“Buyouts represent most of our investments now, and we expect the whole Polish buyout market to continue growing. This is due to a number of fortunate developments – the emergence of large deals, the increasing willingness of Polish entrepreneurs to exit or cash out controlling stakes in their companies, and the acceptance of leverage as a legitimate tool by the public markets and the banks. We have built relationships with several banks that understand the nature of these complex transactions, which are standard to developed markets but fairly new to Poland,” said Michał Rusiecki, a partner at Enterprise Investors.

Harper Hygienics began operations in 1990. It manufactures a range of products used in facial and skin care, including cotton pads, wet wipes, ear swabs, and plaster strips. Harper Hygienics produces both branded products under its Cleanic brand and private label products under the brands of major retailers (Géant, Real, Makro); the branded products account for 60% of domestic sales. Harper Hygienics has built a leading position in the Polish as well as Russian markets for personal hygiene products. It operates a modern manufacturing facility near Warsaw. In 2003 the company achieved revenues of PLN 84 million ($22 million).

Commenting on the transaction, Mouloud Kermiche, founder and president of Harper Hygienics said: “We are delighted to have attracted this remarkable private equity partner to work with on developing our company. The most valuable assets of Harper Hygienics are its excellent products and the well-recognized brand. We strongly believe in the growth potential of the company that we have created. Having gained the Polish and other markets, the common goal of the founders and the new investor in Harper Hygienics will be to make the Cleanic brand recognized in the whole of Central and Eastern Europe.”

Enterprise Investors is the largest private equity firm in Central and Eastern 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 in 93 businesses in Poland and other countries of Central and Eastern Europe, committing $740 million to these transactions. They have completed 60 exits and returned more than $680 million to investors at superior rates of return.