Enterprise Investors to finance expansion of Kinoplex, a major Polish cinema operator
Warsaw, 15 February 2002 — The Polish Enterprise Fund and Polish Enterprise Fund IV, both managed by Enterprise Investors, have paid $3 million for a 39% stake in Kinoplex, a major Polish cinema operator. Kinoplex is to use the funds to partially finance its expansion program. The operator plans to roll out multiplexes in second-tier markets in Poland, where the competitive outlook is very attractive. If Kinoplex achieves its goals in the first stage of the investment program, EI will consider additional exposure of its funds.
“We believe that the management team is very experienced and capable of implementing the investment program and successfully expanding the business. We like the strategy of entering new regions of Poland where direct competition with foreign chains is still non-existent,” commented Jacek Siwicki, managing partner of Enterprise Investors, who is responsible for the investment in Kinoplex.
Kinoplex Sp. z o.o. (formerly Echo Cinema) is the largest Polish-owned movie theater operating group in the country and has been active since 1995. It is a private company with one of the most experienced management teams in the industry. It currently operates 28 screens at 20 locations across Poland. Kinoplex plans to open at least nine multiplexes in Polish cities with over 100,000 inhabitants within two years. Most of the new multiplexes will be located in shopping and entertainment centers.
“We believe in future attendance at Kinoplexes, particularly in cities where alternative ways of spending leisure time are very limited,” said Jerzy Kowalski, member of the board of Kinoplex.
Kinoplex’s market share is now 8%. Its total box office for 2001 was PLN 48 million ($12 million), 25.5% higher than in 2000, with 2.3 million tickets sold. Performance was particularly strong in theaters in small towns. The forecast for 2002 is that attendance will continue to increase steadily.
The movie market in Poland is very fragmented and underdeveloped. Per capita attendance in Poland (0.7) is still very low compared to that in the USA (5.5), or the EU average (2.1). Polish tickets are currently priced at $3 each, which is still below the European standard of $5–$9 per ticket.
Enterprise Investors has been active in Poland and the CEE region since 1990. The four funds managed by Enterprise Investors – Polish Enterprise Fund IV, the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – have invested $650 million in 85 companies across all economic sectors in Poland, Romania and Slovakia. EI invests in companies with a solid management team, a strong market position, and the potential for significant local and international growth.