Darby exits Turkish mezzanine deal

Darby Private Equity has exited its equity and mezzanine stake in Sirma, a Turkish bottled water and beverage manufacturer, to Danone, the firm announced in a statement Tuesday. Danone acquired a 50.1 percent stake in Sirma in the deal, which remains subject to regulatory approval.

Darby did not disclose the size of the transaction, though managing director Burak Dalgin indicated to Private Debt Investor that the deal had generated an internal rate of return of at least 20 percent.

“We have done six investments to date in Turkey and Sirma will be our third exit in Turkey. Two of these new investments and two of the exits, including the potential Sirma exit, happened over the past twelve months,” said Darby managing director Nicholas Kabcenell in a statement.

Dalgin said that the firm’s other recent exit – it sold its stake in Pronet to Cinven – had also generated at least 20 percent for investors.  

The firm made a mezzanine investment in Sirma in 2010 and provided additional equity and mezzanine to finance a new factory for the company in 2011. Darby has been active in Turkey since launching a dedicated office there in 2008, Dalgin said.

Darby made its investment in Sirma through its Darby Converging Europe Mezzanine Fund, a $214 million 2006 vintage vehicle that had generated a negative 5.5 percent internal rate of return and 0.8x return multiple as of 30 September, according to the California Public Employees’ Retirement System.  

Darby was founded in 1994 by former US Secretary of the Treasury Nicholas Brady. The firm is a subsidiary of Franklin Templeton, which has approximately $823 billion in assets under management.