Target Information

Dagat ECO is a family-owned metal processing company that has been in operation for over 20 years, specializing in the processing of pipes and metal profiles. The company boasts a versatile machine park and a highly skilled workforce, allowing it to serve various sectors including automotive, medical, HVAC, rail, and petrochemical industries. With a strong market presence and extensive experience, Dagat ECO demonstrates significant potential for growth going forward.

In the past, Dagat ECO has shown impressive financial results, with a sales increase of over 60% from 2016 to 2019. The most recent fiscal year concluded positively, with the company generating a revenue of nearly 44 million PLN and an EBITDA of 4.4 million PLN. Positioned as the leading supplier of handrail systems for public transport vehicles in Central and Eastern Europe, Dagat ECO has earned a reputation for flexibility and high quality, as evidenced by numerous international certifications.

Industry Overview in Poland

The metal processing industry in Poland has witnessed substantial growth in recent years, driven by rising demands in various sectors such as manufacturing and construction. As a key player within the European market, Poland's metal industry benefits from its strong industrial base and access to skilled labor. The increasing emphasis on automation and technological advancements further enhances the competitive edge of Polish firms in the global arena.

In addition, the industry's adaptability allows firms like Dagat ECO to explore new opportunities within emerging markets while maintaining robust relationships with established clients. With the European Union's focus on improving infrastructure and sustainability, the metal processing sector is set to play a crucial role in facilitating these efforts, generating further demand for high-quality services.

The impact of the COVID-19 pandemic has reshaped many industries, including metal processing. However, the recovery trend indicates a resilient market and a growing need for innovative solutions. Companies that are able to pivot and adapt to changes are likely to experience considerable growth in the coming years, particularly those with longstanding client partnerships and a commitment to quality.

Moreover, Poland's strategic location in Europe serves as an advantageous platform for exporting goods and services. The ongoing enhancements in trade agreements and transportation infrastructures bolster the growth potential of the Polish metal processing industry, providing new avenues for expansion and increased competitiveness on the international stage.

Rationale Behind the Deal

The acquisition of Dagat ECO by Omikron Capital provides strategic advantages that align with the investor's growth objectives. The company's stability and unique know-how present significant opportunities in both domestic and international markets. The partnership aims to leverage Dagat ECO's existing relationships and technical expertise, facilitating expansion into new regions such as Germany, France, and the Benelux countries.

Additionally, the commitment to enhancing the company's administrative and sales capabilities, alongside investments in automation and robotics, positions Dagat ECO to further scale operations effectively. The expected growth trajectory, coupled with favorable market conditions, reinforces the rationale behind this investment.

Investor Information

Omikron Capital is a private equity firm focused on acquiring family-owned businesses seeking to transition or expand through partnership. The firm is renowned for its comprehensive approach, offering active support and expertise to its portfolio companies based on experience garnered from nearly 30 successful transactions.

Previously, Omikron Capital acquired 100% of ZAP-Mechanika, a company specializing in precision metal processing. This strategic move highlights the firm’s commitment to investing in well-performing industrial and service companies with significant growth potential. The investors' strategy emphasizes leveraging their collective knowledge and resources to cultivate effective growth and operational improvements.

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From an investment perspective, the acquisition of Dagat ECO by Omikron Capital appears to be a promising opportunity. The company possesses a stable operational framework and demonstrates a robust capacity for growth, especially with the targeted expansion into international markets. The decision to invest in enhancing organizational capabilities and automation aligns with current industry trends that prioritize efficiency and quality.

Moreover, the established market presence in sectors with high growth potential, such as medical and chemical industries, adds further credibility to this investment choice. As Dagat ECO continues to leverage its existing relationships and focus on quality, the likelihood of achieving projected growth targets is significantly enhanced.

While challenges from the pandemic remain, the strategic direction taken by Omikron Capital, along with the outlined expansion plans, suggests a realistic path for Dagat ECO to strengthen its market position. The growing demand for metal processing services globally represents an additional advantage that can be capitalized on in the foreseeable future.

Overall, this deal underscores the importance of strategic alignment between investors and the target company, particularly in sectors characterized by high competition and rapid change. With the right support and investments, Dagat ECO is well-positioned to not only meet but exceed market expectations, making this a potentially fruitful investment for Omikron Capital.

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