The Clifford Chance Bucharest team advised Abris Capital Partners in its investment in the Pehart group of companies, which was assisted in the deal by Bondoc & Asociatii.
Abris Capital Partners is a leading mid-market private equity fund for Central and Eastern Europe. Set up by Ioan Tecar, the Pehart group of companies has three production facilities where it produces tissue paper and finished goods (toilet paper, kitchen towels and napkins) under its own brands — Pufina and Alint. The group also produces private label products for several retailing groups. Following Abris’ investment, in combination with a contribution of Romanian State aid, a fourth production facility will be opened by the end of this year, so increasing the total group production capacity of tissue paper jumbo rolls to approximately 100 thousand tonnes per annum. The company currently exports most of its production to customers in Central and Southeastern Europe. As part of the transaction, the European Bank for Reconstruction and Development, currently a shareholder in one of the group companies — Pehart Tec SA — will entirely exit its stake. In 2009, the EBRD became a shareholder of Pehart Tec SA and injected capital to support the company's drive to increase its production of tissue products by offering a high-quality alternative to more expensive imports.
Ioan Tecar, who will continue to serve as President of Pehart group, expects the new partnership to strengthen the Company’s position in its market: “We are glad to attract foreign investment to Transylvania, and have Abris Capital as a new partner. Together with Abris, and with their strong backing, we will be able to develop and promote local production, improve our managerial competencies and consolidate our market position. We made these investments with the objective of taking the tissue paper business to a new level of development and, following the commissioning of the upcoming 4th production line, we will reach an annual tissue paper capacity of over 100 thousand tons, thus becoming the largest independent player in the region. I would also take the opportunity to thank and express my appreciation for the EBRD’s support over the last 6 years during which we have developed and modernized Pehart Tec SA; as a result of this cooperation, we have managed to build the Pufina brand to be one of the strongest brands on the market.”
Cezar Scarlat, Partner and Head of Abris Capital Partners Romania added: “We were impressed by Tecar’s entrepreneurial ability to build a significant modern tissue paper producer, sometimes under very difficult circumstances. Being confident in Tecar and the perspectives of the tissue sector in general, we believe the company has underlying advantages and a unique opportunity to serve the fast growing number of retail customers in Romania and the region. We are confident Pehart group will become the strongest regional player. The investment in Pehart group, where Tecar continues to be a significant shareholder, is an important milestone in our path to becoming the leading private equity firm in Romania and the region. This most recent investment is, once again, a clear example of our commitment to support and partner through our collaborative approach with local entrepreneurs across a variety of sectors, both locally and regionally.”
Advising the Pehart Group, the Bondoc & Asociatii team was coordinated by Managing Partner Lucian Bondoc and included recently promoted Partner Simona Petrisor (promotion covered by CEE Legal Matters on January 9, 2015), Senior Associate Mihaela Ciocirlea, and Associates Andreea Lungu and Mihaela Vochineci. Until February 2014, the firm was the Romanian office of White & Case and now operates in an exclusive alliance with the US firm (reported on by CEE Legal Matters on January 30, 2014).
The Clifford Chance team working on the deal was led by Bucharest-based Partner Nadia Badea and Counsel Ioana Talnaru, with assistance from Counsels Mihaela Mindru and Andreea Sisman, and Associates Radu Costin, Andra Jegan and Raluca Coman. Warsaw-based Nick Fletcher advised on the English law aspects of the transaction. Senior Associates Diana Crangasu (Bucharest) and Ulyana Khromyak (Kyiv) are advising on the merger clearances in Romania and Ukraine.
The deal is subject to merger clearance from the competition authorities in Romania and Ukraine.