Ukraine’s leading private equity firm Dragon Capital bought local water company Aqua-Eco, better known in Ukraine for selling the Truskavetska brand of bottled water, the investment company announced on Sep. 2.
Dragon Capital did not disclose how much it paid for Aqua-Eco and its production facilities. Nevertheless, Alexey Oleynikov, managing partner of InVenture Investment Group, said the closing price of the deal was $4 million, Forbes reported. The bottled water producer has struggled in recent years and its net profit was $200,000 (Hr 5.3 million) in 2020, according to Interfax-Ukraine news agency.
Dragon Capital bought Aqua-Eco from IDS Borjomi International, the largest producer of natural mineral waters in post-Soviet countries, including Ukraine. IDS Borjomi International still owns three other mineral water bottling plants in Ukraine’s southern Kherson region.
Dragon Capital closed the deal a few weeks after the Anti-Monopoly Committee (AMCU) gave its approval on Aug. 12. The government agency said it believes that the deal will increase competition in the mineral water industry with a new participant entering the market.
The AMCU also hopes that it will make IDS Borjomi International less of a dominant force in the market, though it still possesses giant bottled water brands like Morshinska and Borjomi.
Extracted from a centuries-old well in Truskavetsk, a picturesque Carpathian town located 750 kilometers west of Kyiv, Truskavetska mineral water is associated with well-being in Ukraine, which explains the popularity of the brand, according to Tomas Fiala, CEO and founder of Dragon Capital.
“It is one of the most recognizable and popular mineral waters in Ukraine,” Fiala said.
Dragon Capital plans to update Truskavets facilities and expand the brand’s share in the Ukrainian mineral water market, according to Yevhen Baranov, Managing Director of Private Equity at the investment firm.
Fiala is convinced that the domestic mineral water sector has potential in Ukraine, especially after noticing how people are starting to hop on the health-conscious trend but still drink very little water compared to those in other East European countries.
Bottled water is also a popular alternative to tap water, which is frequently unsafe or perceived to be unsafe to drink in many parts of Ukraine.
