Genesis Capital, one of the largest providers of private equity in the Czech Republic and Slovakia, has sold its share in JRC Czech, the Czech and Slovak leader in the segment of video games and videogame consoles. During the nearly three years under the ownership of GPEF II Fund, JRC Czech has doubled its sales, providing shareholders with above-average return on their investment. Minority shareholder Slavomír Pavlíček sold his share together with Genesis Capital. JRC Czech is being acquired by Hamaga, a company that has until now mainly specialized in the tourism and development segments. Following the sale of Profimedia and HSW Signall, the deal marks the third successful exit completed by Genesis Capital this year.
JRC Czech runs an e-shop and a network of 30 brick-and-mortar stores in the Czech Republic, most of them situated in prime locations in major shopping malls, including New Smíchov shopping arcade. In addition, JRC operates 10 shops in Slovakia. With consolidated turnover of nearly half a billion crowns, JRC is the largest retail vendor of a wide assortment of computer games and gaming consoles in the Czech Republic and in Slovakia.
Genesis Capital acquired a 100% stake in JRC Czech (formerly operating under the name Game Czech) in August 2012 from the UK-based Game Group Plc, which was divesting its foreign subsidiaries to cope with a difficult financial situation it was facing at that time. Despite the problems of its previous owner, JRC Czech exhibited healthy potential for further growth. A minority share in the company was acquired by Slavomír Pavlíček, the original founder of JRC. The company returned to the original brand and rebranded all stores shortly after the acquisition.
In October 2012, JRC Czech purchased Brloh, an established Slovak gaming brand with its own network of retail outlets. “This add-on acquisition transaction was one of a series of successful steps we took after buying into JRC Czech. Another key move comprised ofstabilizing the management under new CEO Mark Měrka, who will also remain at the helm under the new owner,“says Jan Tauber, the Managing Partner of Genesis Capital.
“The shareholders defined the main strategic goals, provided capital for the acquisition of a retail network in Slovakia, and gave the new management free hand in control of day-to-day operations,“explains Marek Měrka, CEO of JRC Czech. “In line with trends in the sector, we have expanded digital distribution and optimized the product line and the stock management. We have also continued to improve the quality of in-store services.”
Genesis Capital held its stake in JRC for only three years. “A shorter-than-usual holding period for JRC Czech corresponds to our original investment plan,“ explains Tomáš Čása, Genesis Capital’s Investment Manager who was the member of the board of directors responsible for this investment. “Doubling consolidated revenues through the combination of the Slovak acquisition and organic growth during the holding period has helped us achieve satisfactory returns and fulfil our investment plan.“
Genesis Capital relied on the financial consulting services of CN Finance and legal assistance provided by Havel, Holásek & Partners in completing the JRC Czech exit.
The sale of JRC Czech is the third successful exit completed by Genesis Capital within its GPEF II Fund. Last January, Genesis Capital sold Profimedia, the largest photo bank in Central Europe, and HSW Signall, a leading supplier of materials and technologies for marketing and advertising industries in the Czech Republic and Slovakia.
About Genesis Capital s. r. o.
Genesis Capital offers financing to promote growth and development of small and medium-sized companies in the Czech Republic and Slovakia. Through its private equity funds, Genesis Capital has supported more than 30 companies and has helped many of them become leaders in their respective fields. To this date, Genesis Capital raised over 2 billion Czech crowns for the development of Czech and Slovak companies.
Since 1999, Genesis Capital managed three private equity funds with a cumulative size of nearly 100 million Euros. Two of these funds already finished their activities, distributing funds to investors. The third Genesis fund has now been fully invested, providing all raised capital to Czech and Slovak enterprises.
Presently, Genesis Capital is preparing to launch a new fund, Genesis Private Equity Fund III, which will also focus on investments into small and medium-sized enterprises in the Czech Republic and Slovakia.
Genesis Capital holds a share in Servodata, VYDIS, KS Klima-Service, AZ KLIMA, GTH catering, Roltechnik, Sieza, Swell and 3070 Group.