Equest fund acquires 51% of Domo for €50 million

The sources indicated that Domo was valuated according to its 2007 business plan, which stipulates a turnover of €180 million. Domo has 113 stores in Romania and a further eight in Bulgaria.

If the business plan is not met, the difference is to be transformed into shares and granted to Equest. Domo shareholders have been preparing such a transaction since December 2006, when the company was transformed into a holding.

The British fund announced its plans to enter the home appliance retail market last year, according to information in the Bulgarian media. Equest already owns 51 percent of another retailer, Technomarket, which recently entered the Romanian market, and currently has a 40 percent market share in Bulgaria.

Equest entered Romania in 2005, through its subsidiary, Equest Balkan Properties (EBP). The fund has been operating in Bulgaria since 2004.

Besides household appliances, the fund is active in the real estate field. In Romania, Bulgaria and Serbia, the fund finalized 11 transactions by late 2006, totaling €335 million. In Romania alone, Equest made seven real estate acquisitions, worth a total of €94.4 million.

Equest's focus on household appliance retail is motivated by the growing local market. Estimated to be worth some €800-900 million in 2006, the home appliance and IT&C markets are forecast to increase to some €1 billion this year, and to €1.4 billion by 2009, according to the main companies in the field.

The leader of local home appliance and IT&C markets is currently the Altex retailer, with a 26 percent share and net sales worth €220 million. Flamingo International ranks second, with an 18 percent market share and €153.3 million in net sales. Domo ranks third, with a 15 percent market share and net sales worth €122 million.