Target Information

CVI has been nominated for the PSIK 2025 Award by the Polish Association of Capital Investors in two categories. One of which, the Deal of the Year, recognizes CVI's successful exit from its investment in NOWEL Sp. z o.o., a leading bread manufacturer in Poland. CVI initially invested in a minority stake in 2016 and provided significant support for the company's dynamic growth, which included over 800 million PLN in organic expansion investments. During this period, the company's revenues increased sixfold, while EBITDA grew elevenfold.

Upon exiting its investment, CVI achieved an impressive eightfold capital return (CoC) and nearly 30% internal rate of return (IRR). This milestone underscores the effective partnership between CVI and NOWEL, demonstrating the potential for substantial returns when investing in a growing brand within the food sector.

Industry Overview in Poland

The food manufacturing industry in Poland has experienced steady growth in recent years, driven by both domestic consumption and export opportunities. As a member of the European Union, Poland benefits from a vast single market, allowing local producers to access international markets with relative ease. This has spurred investments in the manufacturing sector, particularly in companies specialized in staple food commodities such as bread, dairy, and processed foods.

Poland boasts a rich agricultural landscape, which supports a thriving food processing industry. With a growing population and increasing consumer demand for high-quality products, the bread manufacturing segment is particularly positioned for growth. Brands that can innovate and adapt to changing consumer preferences, such as the demand for healthier and artisan products, are likely to succeed in this competitive landscape.

Moreover, the Polish government's support for the agri-food sector, including grants and subsidies, contributes to a favorable investment environment. The focus on sustainability and food safety in production processes also aligns with global consumer trends, providing opportunities for companies willing to invest in these areas.

Overall, the outlook for the food manufacturing industry in Poland remains optimistic, fueled by a robust supply chain and evolving consumer demands. Investors can find lucrative opportunities in companies that exhibit strong growth potential and adaptability within this dynamic market.

The Rationale Behind the Deal

The rationale for CVI's investment in NOWEL was primarily centered on the company's growth potential within the burgeoning Polish food market. By acquiring a minority stake, CVI positioned itself to support NOWEL's expansion initiatives while reaping the benefits of enhanced revenue and profitability that the food sector has to offer.

Additionally, the successful exit reflects CVI's strategic approach to identifying promising companies and utilizing targeted investments to drive growth. The eightfold return indicates that the investment model not only worked for CVI but also showcased NOWEL as a lucrative opportunity for other investors.

Information about the Investor

CVI is a prominent investment firm known for its strategic investments in high-potential businesses. Over the past several years, CVI has focused on private debt financing, facilitating growth across various sectors, including food manufacturing. The firm's dedicated approach to identifying undervalued companies and driving operational improvements has established its reputation in the investment community.

In 2024, CVI executed 46 transactions in the realm of private debt financing, totaling an impressive 250 million EUR. Cumulatively, the firm has completed 760 transactions valued at 3 billion EUR since its inception. This extensive track record highlights CVI's capability and commitment to fostering business success through collaborative investment strategies.

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The nomination of CVI for these awards signifies an acknowledgment of its impressive investment acumen and industry impact. The exit from NOWEL demonstrates not only the potential high returns achievable in the Polish food manufacturing sector but also solidifies CVI's position as a leading investor.

Based on the details of this investment, it appears to have been an excellent opportunity for CVI, highlighting the strategic alignment between investor objectives and market potential. The sustained growth of NOWEL under CVI's guidance exemplifies the benefits of targeted investments in high-growth sectors.

Furthermore, the recognition from the PSIK awards indicates that CVI's strategies are effective and respected within the investment community. This showcases how thoughtful investment approaches can yield substantial results in the competitive landscape of private equity.

In conclusion, CVI's performance, coupled with the robust growth prospects of the Polish food manufacturing industry, suggests that this investment was well-timed and could serve as a model for similar strategic initiatives in the future.

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