Serving up a stock market double-shot
Central European Distribution Corporation (CEDC), which controls around 13 percent of Poland's alcohol distribution market, has begun preparations for a debut on the Warsaw Stock Exchange (WSE) in the second half of this year. The Florida-based company has been listed on the Nasdaq since 1998.
"This has been our intention from the very beginning," said company president and CEO William Carey, "to have a dual-listed company."
Whether the company will release old or new shares on the WSE is yet to be determined.
If the plan goes through, CEDC will become the sixth foreign firm listed on the Warsaw exchange, and the second American firm. Originally, CEDC planned a debut for 2000 but, says Carey, "the dotcom bubble bursting overshadowed alcohol distribution." He adds that the regulatory environment has improved significantly since then, making it easier for the company to complete the action. Now, the company hopes to expand its investor base.
"Polish investors can't invest in CEDC today," Carey says.
CEDC is facing stiff competition for control of Polmos Białystok (PB). To date, at least eight companies have already submitted offers to the government, who is seeking a strategic investor for PB. Since CEDC claims over 37,000 customers and already distributes 35 percent of PB's turnover, Carey believes CEDC stands a good chance of winning the deal. "We feel it's a natural match."
Along with beer and wine, vodka is one of the only segments of the alcohol market that is currently growing. Polish vodka has a reputation worldwide as being of a very high quality, so if the acquisition comes through, CEDC will launch an all-out offensive on the export of Polish vodka-which the firm believes is currently underutilized-particularly PB's famous Żubrówka brand. At the moment, French distributor Pernod Ricard owns exclusive rights to export Żubrówka until 2006, but only in Europe. CEDC would focus on exports to the US, where it has an extensive network of contacts.
"There's a whole other world out there," says Carey. "We can expand distribution outside of Europe and Japan."
The company will finance the purchase with a combination of its own and acquired funds, and not with capital raised from the flotation, which the firm sees as completely unrelated. "It's coincidental," claims Carey. According to him, the money could be used for up to three more acquisitions this year in an ever more consolidated market.
"In order to survive in the distribution market in Poland, you have to have scale," he says.
"This has been our intention from the very beginning," said company president and CEO William Carey, "to have a dual-listed company."
Whether the company will release old or new shares on the WSE is yet to be determined.
If the plan goes through, CEDC will become the sixth foreign firm listed on the Warsaw exchange, and the second American firm. Originally, CEDC planned a debut for 2000 but, says Carey, "the dotcom bubble bursting overshadowed alcohol distribution." He adds that the regulatory environment has improved significantly since then, making it easier for the company to complete the action. Now, the company hopes to expand its investor base.
"Polish investors can't invest in CEDC today," Carey says.
CEDC is facing stiff competition for control of Polmos Białystok (PB). To date, at least eight companies have already submitted offers to the government, who is seeking a strategic investor for PB. Since CEDC claims over 37,000 customers and already distributes 35 percent of PB's turnover, Carey believes CEDC stands a good chance of winning the deal. "We feel it's a natural match."
Along with beer and wine, vodka is one of the only segments of the alcohol market that is currently growing. Polish vodka has a reputation worldwide as being of a very high quality, so if the acquisition comes through, CEDC will launch an all-out offensive on the export of Polish vodka-which the firm believes is currently underutilized-particularly PB's famous Żubrówka brand. At the moment, French distributor Pernod Ricard owns exclusive rights to export Żubrówka until 2006, but only in Europe. CEDC would focus on exports to the US, where it has an extensive network of contacts.
"There's a whole other world out there," says Carey. "We can expand distribution outside of Europe and Japan."
The company will finance the purchase with a combination of its own and acquired funds, and not with capital raised from the flotation, which the firm sees as completely unrelated. "It's coincidental," claims Carey. According to him, the money could be used for up to three more acquisitions this year in an ever more consolidated market.
"In order to survive in the distribution market in Poland, you have to have scale," he says.
