The Shumen-based business of Krasen and Martin Kamenski brothers, structured in two companies: The Bakers (production of nuts) and New Bakery (production of bakery goods), will get a €3 M investment from Empower private equity funds and the investor Garry Levesley, in exchange for 40% share. All parties involved in the deal announced intentions for long-term strategic cooperation and reaching sales that would bring capacity utilization to a maximum, up from the current 15%, and thus reach an output of BGN 100 M (ca. €50 M).
The transaction will be implemented through the establishment of a new company in which the Kamenski brothers will contribute assets of about BGN 14 M (ca. €7.5 M), acquired with their own funds and loans, and the fund and Garry Levesley will invest €1.5 M each against a 40% stake in the joint venture. The Fund will mainly assist in sales, marketing, and strategic planning.
Prior to founding The Bakers and New Bakery, the Kamenski brothers started their operations in the snacks sector in the early 2000s, with trading nuts, and later, having access to the raw material, decided to develop their own production. Products included Granny’s walnut cookies, bruschettas, and kubeti (bruschetta in the form of little cubes). They managed to establish some sales in international markets and reach revenues of about BGN 3 M (ca. €1.5 M) per year. The more substantial growth came when they became part of the Ficosota group, a FMCG conglomerate in Bulgaria, reaching turnover of BGN 40 M (ca. €20 M). In 2012 the Kamenski brothers sold their share to Ficosota.
The production facilities of The Bakers and New Bakery are based in Shumen, Bulgaria, on an area of 9,000 sq. m. The company employs over 170 people with a tendency to hire more. They produce nuts and seeds under the Zigi brand, a leader in their sector in the higher price segment, cream cakes with filling, Karuzo, and crispy bruschettas Krambals. According to the company, the market for snack seeds, peanuts, croissants and bruschettas in Bulgaria amounts to about BGN 120 M (ca. €60 M) per year, of which it holds a 6-7% share. In 2016 The Bakers / New Bakery had revenues from seeds and nuts of more than BGN 7 M (ca. €3.5 M), and BGN 3.8 M (ca. €1.9 M) from bakery products. Preliminary data for 2017 shows break-even was reached and the two businesses are making profit. Over 60% of sales are coming from export to countries such as Iraq, Palestine and the former Yugoslav republics, with the company currently being focused on developing Central Europe.
In a press statement, investors pointed out the team’s strategic thinking, vision, and experience in creating and developing high-quality innovative products and their ‘world-class factory’ as key factors in the decision for the investment.
