Robert Graffam, Vienna, Austria
Nigel Adam, United States
Vienna, Austria and Washington, DC, June 25, 2007 – Darby Overseas Investments, Ltd. ("Darby"), the private equity arm of Franklin Templeton Investments, announced that its Darby Converging Europe Mezzanine Fund (DCEMF) committed EUR 20 million to a leveraged buyout of DDSG Cargo Group, a leading river transportation company based in Vienna.
DDSG and its subsidiaries together operate a fleet of more than 250 vessels on the Danube and Rhine rivers, from the Black Sea to the North Sea. The company is one of the largest inland waterway shipping companies in Central and Eastern Europe (CEE). The buyout of DDSG, totaling EUR 100 million, was sponsored by East Point Holdings (EPH), a Serbian–controlled conglomerate active in the trading of grains and other commodities.
Robert D. Graffam, Darby's Senior Managing Director – Europe, commented: "We believe that the market for inland waterway shipping on the Danube, currently constrained by inadequate supply, will experience significant expansion in the future. This can be attributed to overall economic growth in the CEE region as well as economic and environmental factors that favor waterway transportation since it is less expensive and produces less pollution. As a long–standing and significant player in this market, DDSG is well positioned to benefit from these trends."
Zoran Drakulic, President of EPH, said: "We are pleased to be initiating this new partnership with Darby. Their financial support and advice were of critical importance in our success in winning the DDSG auction."
Darby has played a pioneering role in bringing mezzanine – a hybrid of both debt and equity – to emerging market regions, initially Latin America, then to Asia and more recently to Central and Eastern Europe. DDSG is the fifth investment by DCEMF. The fund's other investments include AS Rigas Piensaimniekes, a leading dairy products concern in Latvia; UNO, the leading industrial bakery in the Turkish market; Ceske Radiokomunikace, the dominant broadcast and leading alternative telecommunications services provider in the Czech Republic; and FiberNet Group, one of the leading CEE cable television operators, offering cable television, broadband internet and telephony services with a focus on Hungary, Bulgaria and Ukraine
Darby Overseas Investments was founded in 1994 by The Honorable Nicholas F. Brady, who served as U.S. Secretary of the Treasury between 1988 and 1993. In 2003 Darby became a fully owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Institutional, which is part of Franklin Templeton Investments, provides global and domestic investment management solutions managed by the Franklin Global Advisers, Templeton, Franklin Templeton Fixed Income, Franklin Templeton Real Estate Advisors, Darby and Mutual Series investment management teams. The San Mateo, California–based company has 60 years of investment experience and approximately US$620 billion in assets under management as of May 31, 2007.