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A new strategic investor helps Expander accelerate its growth.
Expander’s new strategy includes new products, expansion into foreign markets, network development and strengthening its brand name. Its new strategic investor, Innova Capital, intends to triple the company’s value within the next 3-5 years.
A consortium led by Innova Capital, which included among others 3TS Capital Partners, bought 60% of Expander shares from GE Money. The deal closed on December 19th 2007, after the Urzęd Ochrony Konkurencji I Konsumentów (Office of Competition and Consumer Protection) agreed to the sale. The other 40% of Expander’s shares remain the property of GE Money. Innova Capital is one of the leading private equity funds in Central and Eastern Europe.
The financial services market in Poland and this region has a great potential for expansion, said Krzysztof Kulig, a Partner at Innova Capital. The value of outstanding mortgage loans in Poland is currently 10% PKB, in comparison to an average 50% in ‘old’ Europe. In Kulig’s opinion: The statistics show the great potential for development despite the current slowdown in credit lending. Another determining factor for the continuing growth of the service sector is the low level penetration of this market. At present only 20% of Polish mortgage loans are sold through intermediaries, as opposed to 60% in either Holland or Great Britain.
A highly effective business model, a leading brand name, the largest distribution network and a much respected management team’ says Kulig, were the reasons Innova Capital decided to buy into Expander. It’s the perfect springboard for future expansion both at home and abroad, he added. Innova Capital aims to triple the company’s value within the next 3-5 years. Kulig predicts: Our intention is to take Expander as an IPO to the Warsaw Stock Exchange. We’ll be working towards this goal during the next 2 years.
The new strategy is already taking effect. From the beginning of 2008, Expander has intensified its marketing efforts, working particularly to strengthen its brand awareness. In 2007, while we were waiting for our new investor, we were already discussing Expander’s future with Innova Capital. We are very pleased with the results of these discussions. Expander now has numerous opportunities before it, comments Małgorzata Zbierada-Tyszkiewicz, President of Expander. Our new strategy, made possible by Innova Capital, is based on four key points: geographical expansion, widening our range of financial services, increasing the number of branches and raising customer awareness.
A market analysis of the region has already taken place and an initial choice should be known within the next 12-18 months. Bulgaria, Rumania and the Ukraine are under particular scrutiny. We are looking closely at all the investment instruments available. It’s no secret the greatest rates of return will come from investing directly in a local entity, says Kulig.
Expander is the best known financial services provider amongst its competitors, according to a recent survey conducted by GFK Polonia. In a ranking of top brands published by Rzeczpospolita, Expander holds 4th place in the business services section and comes top of the financial services sector. A quarter of Expander’s transactions last year resulted in additional customer transactions. Having such a strong position in the Polish market, we want Expander to be seen as the most reliable name in the CEE, says Małgorzata Zbierada-Tyszkiewicz.
Strengthening our customer relations is a priority - we want our customers to take their most important financial decisions with us.
As an independent financial advisor, Expander wants to enlarge its network of branches. Currently, it has 57 offices, which will be increased to 75 during the course of this year. The plans are for 100 new outlets to be open by 2010, according to Małgorzata Zbierada-Tyszkiewicz.
They also plan to offer more retail products, particularly in the investment sector. In February they will introduce new structured products and by the end of the first quarter, Expander will be offering more opportunities in foreign investments. A range of so-called tailored products provided by BWE or GE/BPH will complete their portfolio. A key factor to Expander’s future development will be the implementation of the MiFID’s directive. It is likely therefore Expander will become a brokerage house. This opens up yet more opportunities for development, says Małgorzata Zbierada-Tyszkiewicz.
The Company was established in 2000, originally as an Internet broker of financial products. It belonged to Fin Fin SA, which was a subsidiary of Softbank. Its field of operations was promptly changed and in 2001, Expander became an independent financial advisor, which offered its customers a wide range of banking and investment products. It opened its first branch in Warsaw in December 2001. Subsequently, GE Investments bought out Expander in early 2003. In January 2004, a new board of directors was elected, headed up solely by Małgorzata Zbierada-Tyszkiewicz as President. The board then gradually expanded in 2006 with the appointment of three other executives; Piotr Augustynowicz, Konrad Grabowski and Grzegorz Mann.
| Source: | Innova Capital Press Release | | Date: | 2008-01-31 |
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