Commentary by the President of the Management Board of Budimex SA, Dariusz Blocher, on the sale of Budimex Danwood to Barwick Investments Sp. Ltd. (a subsidiary of Enterprise Investors)

In line with its strategy, Budimex focuses on construction activities, residential development and development in the field of infrastructure and building maintenance services, as well as municipal waste management. Budimex Danwood, which operates in a different area than those mentioned above, has been for sale for years. Also because, due to the fundamentally different scopes of operations of Budimex SA and Budimex Danwood and the required different competences, there are no synergy effects justifying the Podlasie company to remain in the Group.

We decided to sell Budimex Danwood because there was an investor who appreciated the value and growth potential of this company built over the years of presence in the Budimex Group, wants to continue developing it and offered us a fair price. Budimex Danwood achieves very good financial results and diversifies geographically the markets in which it operates. However, further dynamic development of this company would require further investments, which Budimex is not interested in for the reasons mentioned.

The sale price of the company’s shares is payable by the buyer on the date of conclusion of the disposition agreement, i.e.: transferring to him the ownership of shares in the estimated amount of PLN 238,600,000. This price will be adjusted to reflect the difference between Danwood’s estimated and actual cash and working capital levels as at November 30, 2013. The above adjustment will be settled by the parties to the transaction within 60 days from the date of conclusion of the disposition agreement, but we do not expect any significant price adjustments.

The sale of Budimex Danwood will have a one-off, significant and positive impact on the results of Budimex SA and the Budimex Group in 2013. Budimex Danwood’s results will be consolidated by the end of November this year. In connection with this transaction, next year’s consolidated revenues and profits of the Budimex Group will be lower than the revenues and profits of Budimex Danwood, but I hope that this loss will be partially compensated by sales in the construction segment.

I am glad that Budimex Danwood is moving to the portfolio of a renowned investor such as Enterprise Investors, which is widely known for strengthening the companies it manages, and which has appreciated the value of the company built in the Budimex Group. I am very satisfied with Budimex’s participation in the successes of Budimex Danwood, which will sail into wider waters thanks to the new investor.

Budimex Danwood Sp. z o.o. – the largest manufacturer of energy-efficient and economically effective prefabricated houses in the timber frame system in Poland (including prefabricated turnkey houses). On the German market, it is one of the 6 largest manufacturers of prefabricated houses and No. 1 in the segment of turnkey prefabricated houses. The company was founded in 1990 and joined the Budimex Group in 2000. It employs 730 people and produces 600 homes a year.

Enterprise Investors – the oldest and one of the largest groups of private equity and venture capital funds in Poland and Central and Eastern Europe. The company has been operating since 1990. The total funds of the eight investment funds created by Enterprise Investors exceeded EUR 2 billion. To date, funds managed by Enterprise Investors have invested a total of EUR 1.6 billion in 131 companies from various sectors of the economy. Revenues from 102 completed investments exceeded EUR 2 billion.

Budimex was the transaction advisor in the sale of Budimex Danwood by Bank Zachodni WBK SA, and the legal advisor was Greenberg Traurig Grzesiak sp.k.