Acquisition of a Slovak napkin manufacturer

Czech investment fund Genesis Capital completed the acquisition of HoReCup, a.s., aiming to realise its growth potential and expand its investment portfolio with another company from the Slovak market.

The highly automated company based in Nitra is one of the leading napkin manufacturers in Central and Eastern Europe. It exports almost its entire production, primarily to the Benelux countries, Scandinavia, the United Kingdom and Germany.

Ján Bendžala and Lubor Benkovič, founders of the company, added: “We believe that, with an experienced investor such as Genesis, we will be able to increase our turnover in the European markets and be even more successful in terms of expanding our production capacity and, of course, our human resources. The experience of both teams, under one umbrella, will allow us to better assess risks and, above all, to increase labour productivity, which is the most important indicator for competitiveness on the markets today.”

Transaction advisory on the seller’s side

Experts from BDO and doubleYou Partners managed the entire transaction process on the seller’s side. The mandate covered initial company analysis, valuation and transaction preparation, investor search, transaction marketing, coordination of the due diligence process, negotiation of terms and the final closing of the transaction.

Legal and tax support for the transaction

BDO Legal helped ensure a smooth transaction through legal advice covering the negotiation of transaction documentation, corporate changes related to the transaction and the buyer’s debt financing, and changes in shareholder relations.

BDO’s tax team comprehensively addressed all tax matters necessary for the successful completion of the transaction.

A partnership for continued growth

“In less than twenty years since HoReCup’s establishment, the founders and management team have succeeded in building an efficient, successful and dynamic company. We are delighted to join forces with them and support HoReCup in its continued growth and development. We believe that in cooperation with the HoReCup team, we can utilize our experience to accelerate the Company's entry into new markets, continue to further improve the technological state of the art of the production and deliver even more value to its customers. This investment also perfectly aligns with our strategy of supporting Central European leaders with high growth prospects, combined with addressing succession issues and generational change. We look forward to our future together and the opportunities this partnership brings.” Tatiana Balkovicová, Senior Investment Director at Genesis Capital Equity, commented on the transaction.

Leading the transaction on the seller’s side

Alexander Šrank, a transaction advisory expert, led the entire process on the seller’s side on behalf of BDO and doubleYou Partners. He added his perspective on the transaction:

“Ages ago, ACCA textbooks taught me the theory of a ‘niche player’ strategy but I only really got it when I saw how a small factory from Nitra can supply half of Europe’s best hotels, restaurants and cafes with branded napkins. Napkins that are part of the tabletop in front of the guest the entire time of their visit, hence the quality actually matters very much. Laser-focused niche player strategy together with a state-of-the-art factory, high-performing team and the reputation built over decades with the clients make HoReCup an exciting proposition. Genesis understood it the best from all potential investors and sent a team that had immediate chemistry with the owners since the first site visit. They have also created a great base for their future cooperation in their common new business with the Vendors by being honest, fair and transparent throughout the entire transaction process.”

About HoReCup

Founded in 2006, HoReCup initially focused on producing paper coffee cups in Kysucké Nové Mesto. The company later relocated to Nitra and expanded its production to include napkins.

HoReCup emphasises quality, hygiene and environmental responsibility. Its production lines are highly automated, utilising state-of-the-art technologies from manufacturing to storage. In 2023, the company received the Diamonds of Slovak Business award and is one of the largest napkin manufacturers in Central and Eastern Europe.

About Genesis Capital

Genesis Capital is a private equity fund group that has supported the development of small and medium-sized enterprises in Central Europe, particularly in the Czech Republic and Slovakia, since 1999.

According to the information provided at the time of the transaction, the group had managed six funds with a total volume exceeding EUR 350 million and had invested in more than 60 companies across various sectors. Investors in these funds included the European Investment Fund (EIF), the European Bank for Reconstruction and Development (EBRD), Česká spořitelna, Amundi Czech Republic, Kooperativa Insurance and other institutions.