‘Poland’s 7/11’ plans IPO, regional expansion

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Zabka is planning an initial public offering (IPO) on the Warsaw Stock Exchange on 17 October, as Poland’s leading convenience shop chain expands into Romania and elsewhere in Central and Eastern Europe (CEE).

The IPO could raise as much as PLN 6.45bn. The IPO is set to be Warsaw’s biggest since since Allegro.eu SA’s EUR 2.55bn offering 4 years ago and Europe’s 4th-largest listing this year. Within an hour on Tuesday 1 October, interest had already exceeded the offer size. 

Zabka, which news network TVP World calls “Poland’s 7/11”, will offer 300mn shares, a 30% stake, at PLN 20-21.5 (EUR 4.67-5.02) apiece, valuing the company at PLN 21.5bn (4.98bn), up from the EUR 1bn that majority shareholder CVC Capital Partners paid for it in 2017. CVC Capital Partners plans to sell 266mn shares but retain control of the company, in which it holds a 77% stake.

With over 10,500 shops in Poland, the franchise chain is aiming to attract capital for further growth with the IPO, seeing its strategic importance as beyond raising capital, but also serving as a catalyst for plans to increase its footprint in Romania, a market it entered last December with its EUR 103.8mn purchase of grocery wholesaler DRIM Daniel.

The IPO could place Zabka in the WIG 20 index of Poland’s largest firms, alongside e-commerce platform Allegro and retailer Dino. Other shareholders, including the European Bank for Reconstruction and Development and the Zabka-management-affiliated Amphibian, are also participating in the sale.

Market expansion led by tech innovation, q-commerce

Zabka executives say franchises, employees, and technological investment will stoke profitability and the continued support of CVC Capital Partners’ stakeholders, even as it partially exits its stake through the IPO, which could in reality increase liquidity.

With the acquisition of DRIM Daniel, Zabka aimed to secure a foothold for a “tech-powered convenience ecosystem” through digital services and innovations, according to the Polish firm. With plans to establish 200 units in Romania by the end of the year, Zabka is aiming to open up to 1,000 stores annually and ultimately operate 19,500 shops in Poland and 4,000 in Romania.

CEO Tomasz Suchanski and chairman Krzysztof Krawczyk put the IPO down to a testament to consistent performance driven by innovation and solid operations, a bullishness is rooted in Poland’s robust economic growth, currently projected to outpace Western Europe, as well as the proven franchise model that employs cutting-edge technology including AI.

The company’s sales were PLN11.1bn in the first half 2024, up 21.5% year-on-year, with adjusted EBITDA up 33.5%, to PLN1.4bn. Zabka currently holds a 20% market share in Poland’s convenience sector, but as that represents under 5% of the country’s total grocery market, it sees room for further penetration as consumer demand for convenience and speed in retail increases.

In addition to its physical expansion, Zabka is venturing into so-called quick-commerce (q-commerce) and setting up an online supermarket, highlighting its commitment to adapting to evolving consumer preferences. Q-commerce, which focuses on rapid deliveries, is gaining traction, and Zabka wants to be at the forefront of this, by integrating AI tools to optimise store locations and use data-driven insights. By aligning physical presence with digital capabilities, the company wants new units run at optimal levels on opening.

Zabka’s IPO comes after a period of stagnation in Warsaw’s equity market, largely attributed to the war in Ukraine and the energy crisis that dampened investor sentiment. The IPO does not involve the sale of new shares, and the company plans to use the earnings to fund growth rather than paying out dividends. Goldman Sachs and JPMorgan are among the IPO coordinators.

This article was updated to include details of investor interest.