MERCATOR SIGNS A CONTRACT FOR SALE OF INTERSPORT GROUP

Pursuant to the Rules and Regulations of the Ljubljana Stock Exchange, d.d, and the relevant legislation, the company Poslovni sistem Mercator, d.d., hereby announces the following:

Ljubljana, 14 September 2016 – , Poslovni sistem Mercator, d.d., and Polish Enterprise Fund VII, a private equity fund managed by Enterprise Investors, have signed a sales purchase agreement on the sale and purchase  of the Intersport Group having the Intersport licence for Western Balkan region. The value of this transaction is up to EUR 34,5  million. During its time of operation within Mercator, the Intersport Group has become the undisputed number one sports retailer in Slovenia and in the wider area of Western Balkans. This transaction enables Intersport to grow further and provides Mercator a strategic partnership in the area of sports equipment. Synergies of the future cooperation are expected on both sides and will provide further growth and development of the sports retail in the region.

The sale of Intersport Group is a part of Mercator's strategy which brings more focus to their principal activity and strong partner as a core tenant in Mercator’s hypermarkets. The agreement stipulates that the new owner will take over all employees of Intersport, as well as the existing business locations.

Toni Balažič, the chairman of the board of Mercator Group has emphasised the following at the signing: »with this transaction, Mercator is getting a strategic partner who will enable further development of Intersport ISI’s range, and continue offering an innovative, high-quality and competitive range of sports equipment to Mercator’s customers and others.«

Enterprise Investors is one of the largest private equity firms in Central and Eastern Europe. Active since 1990, the firm has raised eight funds with total capital exceeding EUR 2 billion. These funds have invested EUR 1.7 billion in 137 companies across a range of sectors. 

“On the back of global trends toward a healthier lifestyle the sportswear segment across various geographies has outpaced the entire shoes & apparel market. We are convinced that it will remain doing so in the years to come. This is one of the many reasons we decided to invest in Intersport ISI and back a strong local management team led by Mateja Jesenek”, said Michał Kędzia, a partner at Enterprise Investors who is responsible for the investment.

Intersport has been present on the Slovenian markets since 1999, when the first Intersport location opened in Mercator Centre in Ljubljana. Since then Slovenian customers have had access to the latest sports equipment of the highest quality at competitive prices. Intersport shops are also known for their professional assistance to the customers.

At the end of 2015, the Intersport Groupoperated 93 Intersport locations in the region, employing a total of 852 people. In 2015, Intersport Group has generated revenues of EUR 81 million, and has added during this year additional 11 locations - 8 owned and 3 franchises. For 2016 a new record sales and business results are expected. Intersport Group is active in all the markets of ex-Yugoslavia as well as the markets of Albania and is an important part of the larger corporation Intersport International.

The finalisation of the transaction is connected to a number of formal procedures including issuing of permits by competent regulators. The transaction is expected to be completed by the end of this year. The financial advisor to Mercator on this transaction was UniCredit.

As of September 14, 2016, this announcement will also be posted on the company website at www.mercatorgroup.si where it shall remain available for a period of no less than 10 years.

Poslovni sistem Mercator, d.d.

Management Board