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CMS advises on the sale of Żabka

22 February 2017

CMS has advised Mid Europa Partners on the sale of Żabka Polska – the largest transaction in the food retail sector in Poland, which is at the same time the largest exit of a private equity fund from an investment project in our country. In the coming months the chain of stores operating under the Żabka and Freshmarket brands will be taken over by CVC Capital Partners, a private equity fund, for which this deal is the second investment on the Polish market. The transaction still requires regulatory approval, and therefore its closing is expected to take place in the second quarter of 2017.

CMS carried out the Vendor Due Diligence of Żabka Polska S.A. and was involved in further stages of the transaction. CMS lawyers were also involved in the acquisition of Żabka by Mid Europa Partners in 2011 and advised Żabka Polska on the acquisitions of several local retail chains.

"Considering the scale of interest in the offered company both from funds that have long been present in this part of Europe, and those only more aggressively entering our region, it could be expected that the sale of Żabka is one of the most prestigious and anticipated transactions announced in Poland this year. Moreover, the increased activity on the M&A market as currently observed in Poland may be maintained in subsequent months, taking into account the transactions that are currently being prepared" – says Jakub Marcinkowski, CMS partner responsible for the transaction.

Żabka Polska currently has approximately 4,600 franchise stores operated by about 3,000 entities. Mid Europa Partners, the hitherto owner of the chain of stores, is one of the leading private equity funds in Central and Eastern Europe, which has recently acquired such entities as Allegro and Profi. The fund was established in 1999 and has accumulated more than EUR 4.6 bln since then. This year, CMS also advised Mid Europa Partners on the sale of Alpha Medical, a network of medical laboratories operating in the Czech Republic and Slovakia, to Unilab.

CVC Capital Partners is one of the leading private equity and investment advisory funds in the world. It has carried out more than 300 investments in more than 50 countries and manages assets worth over USD 50 bln. In 2015 CVC Capital Partners carried out its first transaction in Poland – assisted by CMS it purchased PKP Energetyka.

The team that advised in the transaction was led by Jakub Marcinkowski (partner, advocate), and was composed of Tomasz Waligórski (advocate, senior associate), Grzegorz Pączek (advocate), Jakub Szczygieł and Mateusz Baszczyk, who were supported by: Michał Derdak (legal counsel, senior associate) and Krzysztof Sikora (legal counsel) with respect to competition law, Maciej Andrzejewski with respect to labour law, Karina Zielińska with respect to IP/IT issues and Adriana Cieśla (legal counsel), Joanna Pierzchała and Marcin Pasik of CMS’ real estate and construction department.

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Jakub Marcinkowski