Allegro’s e-commerce platform boosted by private equity investments

The recent deal to purchase Allegro will enable the Polish e-commerce platform to embrace new technologies and expand into new markets. As well as injecting funds, the new owners, private equity firms Cinven, Permira and Mid Europa Partners, plan to develop mobile and tablet versions of the site and push expansion into neighbouring markets following the buyout. Societe Generale played a key role as left lead arranger in the transaction.

Allegro is already the most popular website in its home country and 251st most popular in the world. It enables some 14m monthly transactions between its 20m users, selling more than 850,000 items per day. To put the 40% share of the Polish market it enjoys into perspective, Ebay has just 3% market share in Poland.

Despite its domestic dominance, the online store and auction site is probably best known beyond Poland for a TV advert featuring a grandfather learning English to speak to his grandchild, which went viral last Christmas and received 13 million views.

The three new owners will seek to increase Allegro’s presence across Europe.

Jonathan Tweed, Head of TMT Finance for Societe Generale, London, said, “The new owners will have funds and the capability to drive Allegro to the next level, make it a regional champion as well as a local champion.”

Within its home market, the deal should make an increased volume of transactions possible, driving the Polish economy. This benefit is endorsed by the involvement of the EBRD (European Bank for Reconstruction & Development) as a lender. The bank typically only funds infrastructure projects, and its involvement signifies recognition of Allegro’s potential contribution to the real economy in Poland.

The deal was the largest ever private equity backed deal conducted in Poland and one of the top five largest M&A transactions ever in the country. It also features the first ever second-lien debt facility to be denominated in the Polish Zloty, providing a further boost to the country’s economy.