The European Bank for Reconstruction and Development (EBRD), CEECAT Capital, a regional private equity fund partnering with visionary founders to help promote growth, good governance and social responsibility in Emerging Europe, and Morphosis Capital Fund II, a growth capital fund focused on developing and transforming local SMEs into regional players, announce the signing of an agreement to become majority shareholder in the local retailer La Cocos, owned by Romanian entrepreneurs Iulian and Gianina Nica. The partnership targets an accelerated expansion of the La Cocos footprint across Romania.
“We are proud of La Cocos’s remarkable growth and the positive impact we have had on communities across the areas where we are present. After nearly a decade of activity, we have realized that to expand nationally, we need significant investments, without which our expansion could take over 15 years. As the Founder of La Cocos, this transaction provides us with the financial resources and expertise necessary to rapidly expand our network by a double-digit number of locations over the next four years. Our shared goal is to consolidate our domestic leadership in food retail. Together with the La Cocos team, I thank our investors for their trust and future support in achieving this ambitious goal. Strong partners are essential in large-scale projects to supplement financial resources and maximize efficiency. I hope all 720 of our colleagues, whether they have been with us from the beginning or joined along the way, see this partnership as an opportunity for growth and consolidation. With this select consortium by our side, we have not just a strong partnership but also a strategist for the future development of our business,” stated Iulian Nica, Founder and CEO of La Cocos.
Founded in 2014, La Cocos is a Romanian discount retailer currently operating three locations in Ploiesti and Bucharest. With a unique business model focused on offering an efficient product assortment at highly competitive prices, La Cocos recorded an annual sales growth of 24% between 2018 and 2022, outpacing the growth rate of the major players in the Romanian grocery retail market. In 2023, the company recorded revenues of 200 million euro. La Cocos offers approximately 10,000 SKUs (Stock Keeping Unit) and meets customers’ needs in a single shopping location.
La Cocos serves B2C customers and small B2B businesses, offering a well-curated assortment of consumer goods, including A-brands. Its business model is based on low operational costs and efficient shopping experience, which allows it to offer lower prices than its competitors. The La Cocos store network is recognized for its “no-frills” approach and for the strategic positioning of its stores in peripheral areas, allowing it to maximize operational efficiency.
Tamas Nagy, Co-Head of EBRD Private Equity, stated: “We are pleased to support growth and expansion of La Cocos in Romania alongside co-investors, Morphosis Capital and CEECAT Capital. Food retail is one of the most active areas of investment for EBRD and this investment is a great opportunity for the Bank to support scaling up of an innovative retail business model in an attractive market of Romania, championed by a strong and reputable entrepreneur, Iulian Nica.”
“We are excited to support La Cocos as it expands its geographic presence in Romania. Iulian and his team have developed a unique and successful format and with our collective investment we believe La Cocos can grow into a national champion and regional leader in its sector. We look forward to working with Iulian and our partners from EBRD and Morphosis in this journey,” stated Anthony Stalker, Partner of CEECAT Capital and Chairman of the Investment Advisory Committee.
“We are thrilled to invest in La Cocos, a local entrepreneurial success story that has demonstrated its remarkable performance in the Romanian retail market. This investment, a second one for Morphosis Capital Fund 2, will support the rapid expansion of the La Cocos network nationwide. Our shared vision with CEECAT Capital and EBRD is to develop a chain of stores that meets the needs of both B2B and B2C clients and for La Cocos to become a reference point for consumers across the country, thus contributing to economic growth and strengthening the local economy,” stated Simona Gemeneanu, Partner at Morphosis Capital.
The investment made by the partnership between EBRD, CEECAT Capital and Morphosis Capital comes at a crucial moment for the expansion of La Cocos. The discount retail sector is the most dynamic segment of the grocery retail market in Romania, with high growth potential in the coming years. The partnership aims to develop the La Cocos network across Romania by opening a double-digit number of new locations over the next four years. It is designed to leverage the expertise of each partner involved. Morphosis Capital contributes with its strong local presence and impressive track record in developing Romanian businesses. CEECAT Capital brings regional experience in retail expansion, proven by the success of GOMEX in Serbia. EBRD contributes its extensive experience in supporting the development of the food retail sector in several Central and Eastern European countries.
The transaction was facilitated by the law firms Mihaela Mindru Law Office and Act Legal Romania, with a team led by Of Counsel Christian Mindru, who represented the consortium of Morphosis Capital, CEECAT Capital and EBRD on legal matters. They were supported by Bryan Cave Leighton Paisner LLP, through Partner Carol Osbourne, on UK legal matters, and Van Campen Liem Luxembourg, through Partner Christophe Balthazard, on Luxembourg legal aspects. The entrepreneurs Iulian and Gianina Nica were represented by Tuca Zbarcea & Asociatii. Additionally, KPMG conducted the financial, tax, and ESG due diligence process, while Kearney conducted the commercial due diligence process.
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About La Cocos
Founded in 2014, La Cocos is a Romanian hard discounter retailer specializing in offering essential products at extremely competitive prices. With three stores located in Ploiesti and Bucharest, La Cocos caters to both B2C customers and small B2B businesses, offering a limited but well-curated assortment of consumer goods. The business model of La Cocos is based on low operational costs and an efficient shopping experience, which allows it to offer lower prices than its competitors. The La Cocos store network is recognized for its “no-frills” approach and for the strategic positioning of its stores in peripheral areas, which allows it to maximize operational efficiency.
About EBRD
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 36 economies across three continents. The Bank is a leading institutional investor in Romania. To date, it has invested over €11 billion in 547 projects across the country. www.ebrd.com
About CEECAT Capital
CEECAT Capital is a private equity investment manager that has been investing in small and mid market companies in CEE and Turkey since 2005. Its investor base includes global financial institutions, pension funds, endowments and family offices, with a mission to create long-term value for all shareholders. CEECAT Capital promotes socially responsible growth and corporate governance, focusing on the impact of portfolio companies on their carbon footprint, diversity and involvement in their local communities. CEECAT Capital works with CEOs and management teams to develop concrete plans to effect meaningful and long-lasting change, not only in their communities but also the wider environment that they operate in. The team operates out of five offices: London, Luxembourg, Bucharest, Belgrade and Istanbul. www.ceecat.com
About Morphosis Capital
Morphosis Capital Cooperatief UA is a private equity fund established in 2018 by four Romanian entrepreneurs: Simona Gemeneanu, Gabriela Dumitru, Dragoș Petre, and Andrei Gemeneanu, aiming to contribute to the development and transformation of Romanian SMEs into regional players. The European Investment Fund (EIF), the main financing platform for European SMEs co-financed through the Regional Operational Program, is the main investor in Morphosis Capital, while the founders themselves are co-investors. Morphosis Capital invests in Romanian companies with high growth potential in sectors such as medical services, technology, manufacturing, and B2B services, with prospects for international expansion and EBITDA of at least half a million euros. Morphosis Capital’s portfolio includes DocProcess, Medima Health, EMI, Cronos Med, and Stay Fit Gym. In 2023, Morphosis completed its first exit by selling its minority stake in Clinicile Dentare Dr. Leahu to Regina Maria.
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