Expansion of the Largest Czech Photo Bank to Be Supported by a New Investor
Genesis Private Equity Fund II Acquires Majority Share in Profimedia
After ten years of autonomous growth, Profimedia, a 100% Czech-owned company and the leading provider of visual content for the media and advertising industry on the Czech and Slovak markets, has attracted a new investor. The Genesis Private Equity Fund II (GPEF II) has acquired a majority share in Profimedia, while its founder and until now sole owner Petr Novák will retain a 40 percent share and continue to manage the company.
“During its ten year history, Profimedia has become the largest Czech photo bank on the market. To continue our dynamic growth in the future, the company must focus more strongly on foreign markets. Capital obtained from the GPEF II fund will help us in this expansion,” said Petr Novák, who founded Profimedia at the age of twenty, while still a student at the University of Economics in Prague.
“Profimedia can be seen as an example of ‘success story’ in which a young Czech entrepreneur built a company from the ground up and helped it reach the top in its field. We’re pleased that, as the new majority shareholder, we will have the opportunity to take part in its successful further development,” said Jan Tauber, the Director of Genesis Capital, which manages the GPEF II fund. In the current environment, characterised by difficult access to standard bank finance for small and medium businesses, the fund, with a volume of 40 million euro, is an effective alternative through which companies with growth potential can obtain needed capital. GPEF II, whose investors include the European Bank for Reconstruction and Development and Česká spořitelna, provides growth capital to small and medium companies in the Czech Republic and Slovakia as well as financing of company buy-outs. The investment in Profimedia is a combination of both these types of financing.
Profimedia manages an extensive databank of more than 40 million professional images, footage, illustrations and promotional photographs from around the world, provided through its client-friendly web application for publication in the media or for advertising and marketing purposes. With an over fifty percent market share in the Czech Republic, where it is the clear market leader, the company’s clients include the majority of publishers of newspapers, books and magazines, as well as leading advertising agencies, web portal operators, television stations and many large companies. The situation is similar in Slovakia, where the company’s market share is estimated at 60 percent. Profimedia is the third largest photo agency in Hungary and also operates in Slovenia, Croatia and Serbia. Overall, Profimedia works with more than 400 publishers and 1,200 advertising agencies. Most of the photographs in its database come from major international suppliers of visual material such as Corbis, AFP, Time Inc. or BBC, and private photographers. However the number of its own photographs is also growing.
To secure its further growth, Profimedia is currently looking for opportunities to acquire companies in the same field of business in Central and Eastern Europe. "Some negotiations have progressed significantly,” said Petr Novák, adding that potential acquisitions would be financed from capital obtained from the sale of the majority share in Profimedia to the GPEF II fund. Another area in which the company sees considerable growth potential is so-called micro-stock – the sale of rights for the publication of photographs in lower resolution, suitable, for example, for the creation of websites. “We estimate that this market segment will grow in double figures in the coming years and Profimedia is ready to be part of that growth,” said Petr Novák.
Deloitte acted as a financial advisor to the owner of Profimedia. “We were delighted to assist the owner of the company in successfully closing this transaction in these economically challenging times. This transaction should help Profimedia in its further development and cross-border expansion," noted Pavel Dědek, Director of Deloitte's Financial Advisory services.