In a few years the new partner would sell off his shares on the stock market – Further acquisitions to be expected in the region

Following the leading private equity firm, Mid Europa Partners’(MEP) 49,05% stake acquisition two weeks ago of Waberer’s Holding Zrt, the owners are now looking for further companies to acquire in Austria, The Chech Republic, Slovakia and Romania. Craig Butcher, senior partner of Mid Europa and head of its Budapest office announced Tuesday at a press conference, that since the MEP arranges 3 – 5 year investments they are considering eventually selling the stakes purchased in Waberer’s on the Budapest stock exchange. 

In responding to Vilaggazdasag’s (World Economy) question György Wáberer, owner-CEO commented, that after having acquired a few firms – in about 2 – 3 years – the most appropriate time would be selected to take the company public. The owner-CEO has been researching the possibilities for his company to go public for a number of years now, but – especially during the recession period – the circumstances were not favorable. The independent private equity firm is to implement a capital increase of 12m euros within one year in the carrier company operating 2300 trucks, while the contract also allows for the possibility of György Wáberer increasing his ownership percentage in the future. All this will raise the company‘s base capital by at least 20m euros, enabling the firm to double its turnover over a few years time in order to jump from the current 6th place to the third place in the ranking of European carrier companies.  

‘The largest carrier company in Europe operates with over 6000 vehicles, however, due to the restructuring we put in place last year we currently have no size limitations.’ – said Mr. Wáberer reflecting upon the question of how big a company is still manageable. ‘The system of large organizational structures had reached its limitations earlier in Hungary, which is why we have initiated a multi step re-organizational process within the group.  Starting in July of last year the carrier division, the fleet of Waberer’s International has been divided into separate groups of approximately 60 vehicles, each forming an independent firm, receiving leadership possibilities with the option of ownership up to 49%.  

‘By expanding the perception of ownership to the lower levels in the company we are increasing the interest of our leaders. The approximately $1.5 m annual performance of the hereby created firms becomes comparable, allowing for competition within the holding - explains the owner-CEO – Six years ago in the US a professional carrier company employed 14 people for every 100 trucks. At that time 100 trucks provided for 28 people here at home, but in Western Europe that number was only 17. With the help of the abovementioned streamlining we will catch up with the Western European standards this year. Due to Hungarian income levels, this will definitely give us a significant competitive advantage on the international carrier market.’
György Wáberer considers the contract with Mid Europa Partners the fourth largest business transaction of his life, which, just like the other 3, ensures him great possibilities. The investment of a major financial player during these times of recession and the lack of capital has opened the possibilities of new resources for the company owner, who is full of dynamic plans. In his view these acquisitions will also become significant because numerous countries in Western Europe have showed considerable development. 

‘Germany used to be the motor behind the development of the Union, but we mustn’t forget, that Poland practically did not have a recession, and currently it is showing a 3-4% increase. We can see a growth of similar percentage in the Chech Republic as well as in Slovakia; the French economy has also picked up recently and in Sweden the GDP increase is currently around 6%. This is the wave we need to ride.’ – summarized Mr. Wáberer adding, that over the last few years they have managed to make sure, the significant partners consider the holding to be among the most reliable freight and carrier companies on the market.  This means that the Wáberer’s vehicles complete about 60% of the total 320 million kilometers run annually in a so called third country delivery, meaning that both loading and unloading take place in a foreign country. 

The relationship between MEP and Waberer’s Holding is not a recent one. The private equity group was already interested in the company 3 years ago, before the recession. According to Mr. Wáberer the result, that this interest has turned into a signed agreement is due mostly to the fact, that, while many companies all over Europe have gone under, and many are still struggling, the Waberer’s Group did not weaken but instead gained strength.  
Timing was perfect for the deal to be sealed, since the previous co-owner, AIG New Europe Fund was ready to sell off its share of 34%. At the same time AIG was also present with the same percentage in other ventures outside the holding such as the logistical center, BILK or the Royal Sped.
The new investor, however, was not interested in ownership in any companies outside of the basic practice. This is how Mid Europa Partners, with a smaller presence, became owner of a larger percentage of the holding compared to AIG’s 34%.

Mr . Wáberer’s major business transactions:

1994: the privatization of Volán Tefu
2002: Acquisition of Hungarocamion, AIG New Europe Fund’s 34% ownership in the Waberer’s Group
2011: The Mid Europa Partners’ 49% share in the Waberer’s Holding Zrt

April, 2011