Czech Eurowag's shares plunge 10% in London on investor sale

Shares of the Czech company Eurowag, founded by entrepreneur Martin Vohánka, dropped sharply on the London Stock Exchange on Friday — by almost 10%, to their lowest level this year. The reason has nothing to do with problems in the business; rather, longtime investor TA Associates sold another large block of shares.

Eurowag is a transport-technology company that digitizes Europe's freight-trucking industry. It was with the backing of the American fund TA Associates that Vohánka took the company public on the London Stock Exchange ten years ago. Like any private equity fund, TA Associates works to its own investment time horizon, and it is now gradually reducing its stake.

This time the fund sold a block of shares worth £30 million (about 850 million crowns) at 100 pence apiece — a notable discount to Thursday's closing price of 108 pence. This was a so-called placing, a secondary sale of existing shares among institutional investors that does not raise new capital. Eurowag itself was not party to the deal and received no money from it.

This is already the second such sale: TA Associates carried out the first one last autumn. Since then the fund has sold a total of 91 million shares — more than half of its original stake — earning £86.1 million (nearly 2.5 billion crowns) in the process. The fund now holds 88.5 million shares worth about £88.5 million, equivalent to a stake of roughly 12.7%.

Back in February, on the Money Maker podcast, Vohánka himself said he expected his partner's stake to shrink further. “You can expect that, at this share price, they'll be willing to keep selling. There's a queue of buyers, so I believe it will all work out,” the entrepreneur said at the time. Now he has simply confirmed his own words: “We have no influence over TA Associates' decisions about their stake in Eurowag. Given that they've held the stake for ten years now, it was expected that more deals would follow after the autumn sale.”

The 50-year-old businessman has always spoken warmly of his investment partner: “I've been very lucky. Everything they promised me at the start — who they are and how they work — they delivered on for all ten years, even through hard times. Their investment thesis was: ‘Martin, we believe in you, you have talent, you create value, you're consistent and ethical.’ And even though we had different views and some difficult moments, in the end they always said: ‘Martin, if that's what you want — do it.’ They were simply there for me.”

Despite the share-price slump, Vohánka himself remains optimistic: he believes Eurowag's real value is significantly higher than its current market valuation, and that the long-term partner's share sale is merely a technical part of the company's growth, one that increases the free float and makes the stock more accessible to new investors.