Family companies are usually jealous to ownership and rarely admit foreign investors. One of recent exceptions is Bulgarian plastic packaging producer Teda Pack. A few months ago the company, which had a turnover of 40 million levs (20.4 million euro) in 2021, attracted the interest of CEECAT Capital, which acquired a majority stake in it. The new shareholder will support the next stage of the company's development and projects for capacity expansion at the factories in the town of Botevgrad and the village of Zelendol (Blagoevgrad region) are already in the works. The aim is to ensure revenue growth of at least 25% a year.
The first 30 years
Teda Pack was registered at the beginning of this year as a result of the merger of Teda-MM and LDS Plast after the deal, which was completed last September. The packaging business itself was set up 30 years ago by Emil Mladenov and initially operated in rented premises in Blagoevgrad. The capacity gradually increased, the company bought its own production building and Mladenov's son and daughter, Danail and Teodora, joined the management team. The line of business has remained unchanged since the beginning: production of thermoformed packaging mainly for the food industry.
Besides growing organically, in 2015 the company acquired a second enterprise, Mipaplast (later renamed to LDS Plast), in the village of Zelendol. The two firms operated independently until the merger. Their total sales increased gradually over the years, reaching nearly 25 million levs in 2020 and almost doubling last year to 40 million levs. Emil Mladenov withdrew from the management after the deal.
CEECAT Capital's official announcement defines Teda as the largest independent thermoforming company for right food packaging in Southeast Europe. Its products are sold in many countries in Europe, with exports generating 75% of the company's revenue. Teda Pack employs some 220 people.
The business was identified as an investment opportunity by CEECAT Capital last year, while Teda was not actively looking for a partner. "The fund wanted to invest in the industry, while we wanted to accelerate the company's development. We think that together we can achieve what would otherwise be difficult for us as a family company," Danail Mladenov said.
CEECAT Capital explains its decision to invest in Teda Pack with the company's position of a top-tier supplier of sustainable thermoformed food packaging in the region. "The family has built a truly efficient business focusing on excellence in service & quality, and we are excited to support the next phase of growth by enabling a highly successful shareholder transition," CEECAT Capital partner Anthony Stalker said in the announcement.
The price of the deal has not been disclosed. The Mladenovs keep a minority (40%) share in the company through Luxembourg-based Goodpack, which is the direct buyer of Teda Pack. The company will be managed by the Mladenovs and strategic decisions will be taken together with the fund.
Future plans include further growing the business to ensure an increase in turnover of 25 to 30% a year. For the purpose, the production capacity of the two factories will be expanded and the investment projects are already under way. In Danail Mladenov's words, market demand is strong. "Our company has positioned itself very well in recent years and is seen as a quality manufacturer with competitive prices. The market is vast and every proven producer in our industry has an opportunity to grow," he explained.