Enterprise Investors’ venture capital fund to finance the rollout of R&C Union
Warsaw, 14 May 2009 — Enterprise Venture Fund I (EVF), the venture capital fund managed by Enterprise Investors (EI), has signed an agreement to buy 47.9% of R&C Union, one of the biggest Polish restaurant and music club chains. EVF will invest a total of PLN 13.1 million (approx. €3 million) in the company, which requires the new funds for further development of the chains it manages.
R&C Union is listed on New Connect, the Warsaw Stock Exchange’s parallel market.
- Enterprise Venture Fund I will become R&C Union’s majority shareholder in this investment.
- R&C Union was created as a merger of Sioux and Lizard in 2007 and went public on New Connect
in 2008.
The company owns a chain of 15 Sioux restaurants and 8 Lizard King and Fever music clubs. The restaurants operate
in the upper casual segment of the market and their design is themed on the Wild West style. The music clubs offer blues,
jazz and rock, and have live concerts almost daily. Both the restaurants and music clubs are located in city centers and in shopping malls in large Polish cities of more than 200,000 inhabitants.
The company has recently demonstrated good financial performance and has grown quickly, also thanks to the fact that both the chains managed by R&C Union are unique on the Polish market. In 2008 R&C Union’s sales amounted to PLN 14 million (approx. €4 million), which represents a 57% increase over the previous year. The company’s net profit totaled PLN 1.7 million (approx. €0.5 million).
“The good prospects for the restaurant sector in Poland, with its very low share of organized chains, the interesting combination of the restaurant chain concept with music clubs which broadens the target group, and the attractive operational model that combines full control over the restaurants with an entrepreneurial approach to their management by the franchisees – these were all arguments in favor of our investment in this company,” said Rafał Bator, Enterprise Investors partner who heads EI’s venture capital fund.
R&C Union is managed by Piotr Mikołajczyk, whom EI knows well from its investment in Sfinks (2002-2006). The mutual trust based on that past relationship as well as the first-rate prospects for future cooperation were additional arguments in support of EVF’s investment in R&C.
“The investment by Enterprise Venture Fund I represents a new source of accessible capital that we plan to use for the further development of both these chains. Also, EVF’s involvement in our company increases our credibility in the eyes of public market investors as well as financial institutions and our business partners,” said Piotr Mikołajczyk, president of R&C Union. “As the firm’s management team we appreciate the chance to work with a partner that can help us develop the right market strategy and the most effective management approach, which, as is widely known, always comes as part of the venture capital package,”
Mr. Mikołajczyk added.