Delta Acquires Blocking Stake in Prime Sandwich Shop Chain

MTSince opening its first cafe in July 2002, Prime has boasted a roaring trade.
Delta Private Equity Partners has acquired a blocking stake in the popular Prime sandwich chain, allowing it to expand across Moscow.

Delta did not disclose the size of the deal, saying only that its average deals were worth between $5 million and $10 million, without elaborating.

"To expand faster we needed outside investment," said Dimitros Somovidis, general manager at Fastfood Industries Co., which owns the Prime chain.

Delta Private Equity Partners is a U.S.-based private equity manager that has invested about $300 million in 44 Russian companies through The U.S.- Russia Investment Fund, established in 1994, and the Delta Russia Fund, set up in 2004.

Inspired by Britain's Pret-a-Manger sandwich chain, Prime offers fresh sandwiches, salads and soups prepared on the premises.

Moscow's first Prime cafe opened in July 2002 on Kamergersky Pereulok and boasted a roaring trade based on a formula of healthy food at affordable prices. Cafes on Stary and Novy Arbat followed, and Prime also opened three "corporate cafes" inside the offices of Ernst&Young and PricewaterhouseCoopers, and in a business center on Novy Arbat.

"We looked at the market and saw it was quickly developing and far from saturated," said Delta vice president Natalie Polischuk, explaining why the fund decided to acquire a stake in Prime.

"There is a large group of people who want to eat fast but don't want to eat just anything," she said, referring to Prime's popularity among Moscow expatriates and employees of large international companies.

Somovidis said that Prime planned to open six cafes in Moscow by the end of the year, including one on Pyatnitskaya Ulitsa and one inside the new Krylatsky Hills office center in western Moscow.

By 2007, the chain aims to have 40 cafes in the city, all of them either in the center or inside large office buildings, and five or six in St. Petersburg, he said.