M&A in CEE - Ed.#14
The Fourteenth Edition of M&A Teaser in CEE: CMS’s Emerging Europe M&A Report, Romanian M&A market evolution, Job Offers in CEE and Recent Top Deals
CMS’s Emerging Europe M&A Report 2023/2024
Despite economic and geopolitical challenges, M&A activity in emerging Europe remained resilient in 2023, with transaction volumes dipping only marginally compared to the previous year.
-Deal values slightly decreased, but the number of megadeals valued at EUR 1 billion or more increased.
-Quarter-by-quarter deal value improved, showing a recovery in investor sentiment in the second half of the year.
-Top performing sectors included Telecoms and IT, Manufacturing, and Energy and Utilities, with a notable interest in renewables.
-Middle Eastern investors find CEE countries appealing, with significant investments in the region.
-Despite uncertainties, there are reasons for optimism, with some predicting improvements in economic conditions and a positive outlook for M&A activity in emerging Europe in 2024.
-Telecoms & IT maintained its position as the busiest sector in M&A activity despite a decrease in deal count, with 266 deals in 2023.
-The entrance of strategic investors from the Middle East led to a revival of telecoms megadeals.
-Private Equity activity slowed down due to high interest rates, with 248 deals recorded in 2023, representing a 14.2% decrease year-on-year. However, the total value surged by 57% to EUR 15.5 billion, driven by large exits.
-Telecoms & IT, Manufacturing, and Real Estate & Construction remained focal points for Private Equity investment.
-Energy & Utilities emerged as one of the most dynamic sectors, with 85 M&A deals in 2023, representing an increase of 16 deals year-on-year.
-Energy generation deals increased significantly, primarily due to heightened investment in solar projects, reflecting the ongoing energy transition.
Transaction Trends in the CEE Region
Resilience Amidst Challenges: Despite geopolitical tensions and economic challenges, M&A activity in the CEE region remained resilient in 2023, outperforming the rest of Europe.
Recovery and Growth: Higher interest rates impacted dealmaking, but signs of recovery emerged after a low point in Q1 2023, with technological innovation and energy transition driving market dynamism.
Optimism for the Future: Economic concerns eased in Q4 2023, accompanied by a strong recovery in global equity markets, indicating optimism for the year ahead.
Focus on Adaptability: Despite caution, adaptability remains crucial for success in future M&A transactions.
Sectoral Insights: Manufacturing and healthcare sectors offer growth opportunities, with notable increases in deal value, while telecoms and IT remained top sectors despite a decline in deals.
Private Equity Dynamics: Private equity remains a major force, with strong investment trends recorded in 2023.
Middle East Investments in CEE
Growing Investment Flows: Middle Eastern investors, attracted by favorable asset prices and strategic sectors, contribute to the dynamic growth in the CEE investment landscape.
Diverse Investment Strategies: From infrastructure to telecoms, Middle Eastern investors employ various investment strategies, including direct and indirect investments.
Strategic Acquisitions: Investments focus on sectors like agritech and fintech, aiming to enhance supply chain resilience and address food security concerns.
State-Sponsored Investments: State-owned entities target sectors such as ports and energy to localize production and reduce reliance on Western supply chains.
Long-Term Prospects: As the CEE region develops, opportunities for investment are expected to grow, attracting further interest from US and Middle Eastern investors.
Transition Boosts CEE Energy Deals
Renewable Energy Potential: Collaboration and EU support are essential for transitioning to renewable energy sources, with significant potential in wind, solar, and nuclear energy.
National Initiatives: Countries like Poland and Bulgaria are investing in renewable projects to meet energy demands and enhance energy efficiency.
Market Dynamics: Major utilities transitioning to clean energy drive activity in solar and wind projects, with notable M&A deals in the energy sector.
EU Funding: EU funds for energy transition spur activity in developing new wind and solar projects across the CEE region.
🇷🇴Romanian M&A market evolution during 2023
The Romanian M&A market witnessed 241 transactions in 2023, totaling an estimated value of EUR 6.6 billion.
-Compared to 2022, there was a 6.1% increase in estimated value but a 6.2% reduction in transaction count.
-Globally, M&A activity declined in 2023, reaching a 10-year low in value due to various economic challenges.
-Romanian M&A activity, however, defied global trends for the second consecutive year, showcasing resilience and outperforming other markets.
-Strategic investors dominated the market, accounting for 88% of transactions in 2023, with domestic deals slightly increasing.
-Outbound transactions remained strong, reflecting Romanian investors' readiness for cross-border deals despite a decrease in volume.
-Key sectors driving M&A activity were real estate, hospitality & construction, consumer products & retail, technology, and energy & utilities.
-The largest transactions of 2023 included acquisitions of Profi Rom Food, Enel Romania, Alpha Bank's Romania unit, and others.
-The average transaction size decreased to EUR 37.16 million in 2023, continuing a downward trend from 2020.
-Leading inbound investors originated from the United States, the Netherlands, France, Switzerland, and Poland.
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🇵🇱Warsaw, Poland
EY
Manager - CFO Consulting - Doradztwo dla Dyrektorów Finansowych - Assurance
Deloitte
Senior Associate, Transaction Services, M&A, Financial Advisory
Associate, Corporate Finance, M&A, Financial Advisory
KPMG Poland
M&A Associate (Specialist) – Deal Advisory
Aventis Advise
HR Hints
Accenture Poland
CFO&EV– Risk Analyst/Consultant (ICH Europe)
Santander Bank Polska
Analyst/Associate in the M&A team (f/m)
ARCHE Consulting
Mergers and Acquisitions Manager
🇭🇺Budapest, Hungary
Deloitte
Senior Consultant – Corporate, M&A and International Tax
MOL Group
Senior Group Strategy and M&A Analyst
🇷🇴Bucharest, Romania
Deloitte
Manager | Corporate Finance, M&A Advisory
PwC Romania
Senior Consultant Mergers & Acquisitions
Mergers and Acquisitions Manager
🇨🇿Prague, Czechia
EY
Junior konzultant - CFO Consulting
BDO Chezh Republic
Junior consultant M&A (fúzí, akvizic) a due diligence
🇺🇦Kyiv, Ukraine
Kyivstar
TSMG Holding
Business Development: Mergers & Acquisitions, Deal Origination Associate
🇧🇬Sofia, Bulgaria
A1 Bulgaria
Raiffeisen Bank International AG
Mergers & Acquisitions Analyst (f/m/x)
Mergers and Acquisitions Senior Investment Banker (f/m/x)
🇨🇿Advent International is planning to sell Zentiva, the largest Czechian manufacturer of drugs, which it acquired in 2018 for EUR 1.9 billion from Sanofi. Since then, Zentiva has grown significantly through various acquisitions and its EBITDA has increased from EUR 155 million in 2018 to EUR 327 million in 2022. The estimated value of the company is around EUR 3 billion, potentially reaching up to EUR 4 billion. The deal was advised by PRK Partners.
🇸🇮The Republic of Slovenia has issued EUR 1.5 billion Reg S notes due 2034, with advisory support from Wolf Theiss, Barclays, BNP Paribas, Deutsche Bank, Erste Group, Goldman Sachs Bank Europe, and Nova KBM.
🇵🇱PGE Polska Grupa Energetyczna S.A. has secured a loan agreement for EUR 580 million with Bank Gospodarstwa Krajowego, advised by the international law firm CMS.
🇵🇱The European Investment Fund (EIF) and the European Investment Bank (EIB) have entered into a revolving synthetic securitisation with Europejski Fundusz Leasingowy S.A. (EFL) for a portfolio of leasing receivables worth EUR 460 million. The deal was advised by global law firm White & Case LLP.
Top Deals by country
•TeraPlast, a polyvinyl chloride processor has acquired a 51% majority stake in Palplast Moldova, a polyvinyl chloride processor, for EUR 1.8 million.
•Centrokinetic has expanded its network by acquiring two KineticPlus clinics in Brașov, Romania, and opening a new clinic in Bucharest, bringing its total to 7 units. The expansion was supported by the growth investment fund AGISTA.
•Unilever has sold the Frufru and Urban Monkey brands back to their founder, Mihai Simiuc.
•Vectr Holdings, through its subsidiary Vectr Farm Braila S.R.L., has acquired Padova Agricultura S.R.L and Contara S.R.L, expanding its farming operations to approximately 27,000 hectares of agricultural land in Romania.
•OTP Bank is set to sell its Romanian subsidiary to Banca Transilvania in the first quarter of 2024. The business is valued at EUR 350 million by the Concorde brokerage company.
•Alpha Bank România has acquired the retail activities of Orange Money România, including its digital payments application, credit card and e-money products, customer portfolio, and employees. The deal was advised by Filip & Company.
•Intertranscom Impex SRL has acquired the bankrupt Dan Steel Group Beclean wire factory, a key player in the Romanian metallurgy industry, for EUR 7.5 million.
•Banca Transilvania (BT) and Vienna Insurance Group (VIG) are in competition to acquire BRD Pensii, the pension fund management arm of BRD-SocGen financial group.
•Morphosis Capital Fund II and Vybros Capital Partners have acquired a majority stake in Mark Twain International School, with an investment value in the range of EUR 7-15 million.
•Rheinmetall, a German automotive and arms manufacturer, is acquiring a majority share of 72.5% in Romanian vehicle maker Automecanica Mediaș, which will operate under the name Rheinmetall Automecanica SRL.
•Romania’s polymer processor TeraPlast is set to acquire the Wolfgang Freiler Group, which has production facilities in Hungary, for EUR 16.5 million.
•Bloober Team, an independent Polish computer game developer, made its debut on the WSE Main Market, with advisory support from DZP.
•The Bank Guarantee Fund has received binding offers for the purchase of VeloBank, the 9th largest bank in Poland, previously owned by Leszek Czarnecki. The sale process, expected to be completed by the end of March this year, is now in a decisive phase with the fund beginning to analyze the proposals.
•The Semergy Group, consisting of five digital marketing agencies (Sunrise System, Artefakt, Grupa-Tense, Semahead, and Widzialni.pl), has been acquired by WeNet Group from Bauer Media. The deal was advised by Noerr.
•International Schools Partnership (ISP) has acquired Akademeia Educational Group (AEG), the operator of an independent, academically selective school in Warsaw. The deal was advised by Allen & Overy.
•Infinitas Learning will acquire Wydawnictwa Szkolne i Pedagogiczne SA (WSiP), with advisory support from Wardynski.
•Resource Partners, an independent private equity investor, has acquired a 40% stake in Flex Rent sp. z o.o., a car rental business. The deal was advised by DLA Piper.
•Fulfilio, a company specializing in providing e-commerce logistics services belonging to OEX Group, has acquired a majority stake in SellerSwitch sp. z o. o. The deal was advised by GESSEL.
•Scanmed, a medical group from Abris Capital’s portfolio has acquired 100% of shares in Centrum Rehabilitacji sp. z o.o. The deal was advised by MFW Fiałek.
•Saur Polska, part of the Saur Group, has acquired 100% of shares in Ekos Poznań. The deal was advised by global law firm Hogan Lovells.
•Michał Kołakowski, the majority owner of Arka Gdynia S.A., has sold a 75% stake in the company. The deal was advised by the law firm MFW Fiałek.
•HERACLES, a large multinational group has acquired 100% of W.A.T.T. RECYCLING, a dynamic company in the Greek recycling sector, with the deal being advised by Zepos & Yannopoulos.
•The Greek government has launched the IPO of Athens International Airport (AIA), marking the beginning of a significant year for European privatizations. This is part of a broader trend of state sell-downs, with potential sales from governments in Ireland, Italy, and Greece, including stakes in AIB Group, Monte dei Paschi, and NBG.
•The consortium of Grimaldi Euromed S.P.A. and Minoan Lines S.A. has acquired a 67% stake in Herakleion Port Authority S.A., with the deal advised by KG Law Firm.
•London & Regional Properties has sold Rhodes Bay Hotel & SPA and Elite Suites Rhodes Bay to the H Hotels Collection, with advisory support from Papapolitis & Papapolitis.
•CVC Capital Partners and Emma Capital have acquired 100% of the ownership interest in the Packeta Group, the parent company of Zasilkovna. The deal was advised by CMS.
•Bikero has acquired Cycology, a company that sells equipment for cyclists in its stores in Jablonec nad Nisou and Liberec and also runs its own online store.
•The Czech trading platform FTMO has acquired the marketing agency eVisions Advertising. The deal was advised by the team of Moore Advisory.
•The European Investment Bank (EIB) has restructured bilateral facilities for Agrofusion Group, a global B2B tomato grower and processor, with an aggregate amount of up to EUR 74 million. The deal was advised by INTEGRITES.
•Ukraine’s Deposit Guarantee Fund (DGF) has secured assets worth approx. EUR 39 million, currently held at BNY Mellon, for the defense of Ukraine against Russia. The deal was advised by Hogan Lovells.
•NHUS has acquired TMB Element, a leading producer of concrete elements in the Baltic states. The deal was advised by COBALT.
•Med Grupė, a pan-Baltic distributor of dental equipment, has been acquired by global dental powerhouse Straumann. The deal was advised by WALLESS.
•J&T Group has sold FVE Holding to EPH Group, with the deal being advised by KŠB.
•HB Reavis has sold its technology platform Symbiosy to HqO, with the deal being advised by Dentons. This acquisition will power HB Reavis’ portfolio of workspaces and support its growing global customer base.
•E.ON Hrvatska, a local unit of the German energy group E.ON, has acquired two Croatian companies, Tomting 2010 and Green Eight, as part of its EUR 150 million investment plan for Croatia and Slovenia over the next three years.
Actis has acquired a newly carved-out tower portfolio from Telekom Srbija, which comprises approximately 1,800 macro towers located in Serbia, Bosnia & Herzegovina, and Montenegro. The deal was advised by White & Case LLP.
UK-based Juniper Education has acquired the Bulgarian school management platform, Shkolo. The deal, backed by UK-based investor Horizon Capital, will support the development of the edtech product and facilitate Juniper Education’s foreign expansion.
Portugal’s Mota-Engil Group has sold a 100% stake in Mota-Engil Central Europe to Hungary’s Duna Aszfalt. The deal was advised by DLA Piper.
ABB, a power and automation company based in Zurich, is set to acquire a majority stake in Meshmind, a software service provider from Bosnia and Herzegovina.
Komercijalna Banka is in negotiations to sell seized assets of Euronickel Industries, formerly known as Feni Industries, for EUR 37.9 million. The potential bankruptcy proceedings against Euronickel Industries will not affect the sale.
Aggreko, an international provider of energy solutions, has acquired Resalta, a leading European energy services provider headquartered in Slovenia.
🇨🇿The banks have arranged a EUR 100 million financing for CTP Vlněna, with advisory support from White & Case LLP. Komerční banka was the lead arranger, agent and security agent, and UniCredit Bank Czech Republic and Slovakia, a.s. collaborated as mandated lead arrangers.
🇵🇱ElevenLabs, a Polish-founded voice tech company, has raised EUR 73 million in a Series B funding round, with participation from Czechia's Credo Ventures. Following the round, ElevenLabs’ valuation has reached EUR 1 billion, achieving unicorn status.
🇧🇬🇱🇹🇷🇴The European Investment Bank (EIB) has signed a EUR 40 million loan with Eldrive Holding GmbH to install 8,472 electric vehicle charging stations in Bulgaria, Lithuania, and Romania. This project is backed by the InvestEU programme.
🇸🇰CloudTalk, a Bratislava-based call center software developer, has closed a EUR 26 million Series B round co-led by KPN Ventures and Lead Ventures, with support from existing investors Point Nine Capital, henQ, Presto Ventures, and Orbit Capital.
🇱🇻iCotton has issued EUR 20 million of secured bonds in collaboration with Signet Bank, with advisory support from TGS Baltic and Deloitte Legal.
🇺🇦Carmoola, a London-based fintech specializing in direct-to-consumer car finance, has secured an equity investment of EUR 18.15 million from a group of investors including QED Investors, VentureFriends, InMotion Ventures, AlleyCorp, and Kyiv-based u.ventures.
🇷🇴Eleving Group has raised EUR 10 million for its Romanian business, Mogo Romania, from ACP Credit.
🇷🇴ACP Credit has provided EUR 10 million in financing to the Eleving Group for the expansion of the group’s business in Romania. The financing transaction was carried out with Mogo Romania, a subsidiary of the Eleving Group.
🇧🇬Nasekomo, a technology company transforming organic co-products into high-value products, has closed a EUR 8 million equity investment round led by INVENIO Partners and several other investors, with advisory support from DGKV. The firm also acted as Bulgarian counsel for INVENIO Partners.
🇵🇱Polish martech startup edrone has raised EUR 4.65 million in a funding round led by INventures, with participation from Mueller Medien, Atmos, and PortfoLion.
🇵🇱XBS Group has refinanced its current loans and obtained an investment loan, with comprehensive legal advice provided by MFW Fiałek. The investment loan was obtained from mBank S.A.
🇺🇦Horizon Capital has acquired a minority stake in Viseven, a leading global marketing tech provider servicing the pharmaceutical and life sciences industry. The deal was advised by AVELLUM.
🇵🇱Cogito Capital Partners has invested in SKY ENGINE AI, a London-based vendor of Generative AI Synthetic Data Cloud platform for deep learning in vision AI. The deal was advised by MFW Fiałek and Orrick, Herrington & Sutcliffe LLP.
🇨🇿The Imperial Hotel, a five-star hotel in Prague known for the Café Imperial restaurant co-owned by chef Zdeněk Pohlreich, is up for sale. The unions, who currently own the building, are accepting offers until April 15, with a minimum price of EUR 86 million.
🇨🇿G City Europe Limited has sold the Arkády Pankrác shopping center to the Czech real estate fund Trigea from the Partners group. The deal was advised by Clifford Chance.
🇵🇱Merity Funds has acquired a real estate property located in Gliwice, with the development and management of the proposed multi-tenant logistics project being handled by GLP Poland. The deal was advised by Greenberg Traurig.
🇵🇱Palmira Capital Partners has acquired a logistics and office center in Poland from Mirae for the European Core Logistics Fund (ECLF), with advisory support from Dentons. The deal marks the full investment of the ECLF, which has a target volume of EUR 400 million.
🇵🇱P Capital Partners (PCP) has provided a Euro-denominated senior debt package to project companies controlled by SUSI Partners for a 167 MW portfolio of photovoltaic and wind power projects in Poland, with advisory support from Dentons.
🇵🇱Bank Polska Kasa Opieki has provided financing for the construction of Vaskol’s photovoltaics portfolio in Poland, with advisory support from Norton Rose Fulbright and Dentons.
🇵🇱Yevulei Shemesh Renewable Energy Group Ltd has financed the construction and operation of a 48 MW onshore wind farm in south-eastern Poland for EUR 77.6 million, with advisory support from Dentons.
🇵🇱R.Power, a major independent green energy producer in Poland, has signed a 10-year virtual Power Purchase Agreement (vPPA) with Allegro, Europe’s largest e-commerce platform, securing the price of over 200 GWh of green electricity to be produced between 2025 and 2035.
🇷🇴UniCredit Bank SA has financed EUR 39.3 million for Comcris Energy S.R.L, a subsidiary of Enery group, for the construction of a solar ground-mounted photovoltaic project in Sărmășag, Romania, advised by the international law firm CMS.
🇬🇷Macquarie Asset Management has acquired 50% of the share capital of ENEL GREEN POWER HELLAS, advised by Zepos & Yannopoulos law firm which also advised all four Greek systemic banks that provided funding for the acquisition costs.
🇷🇴ENGIE Romania has acquired an operational wind farm with a capacity of 80MW, advised by RTPR.
🇷🇸Evelixon Trading Limited acquired a 100% share in the project company Grand Wind Park from Windvision Serbia Holding and later sold a 50% share in the same company to MK Green Energy Limited. The transactions, advised by Kinstellar, involve the development of wind farms in Pančevo with a combined planned installed capacity of 270 MW.
🇵🇱PKO Bank Polski and the European Bank for Reconstruction and Development (EBRD) have provided debt financing for the construction of the Grąbkowo wind farm and operational support for the Orla wind farm, both operated by subsidiaries of Eurowatt Green Energy Group. The financing includes an extension of EBRD’s financial package to EUR 29 million and a parallel loan from PKO Bank Polski.
Piotr Żak is now the president of Telewizja Polsat’s management board. Former president, Stanisław Janowski, will supervise the advertising market on the supervisory boards of Telewizja Polsat and Polsat Media. The Polsat Plus Group, which includes these companies, is controlled by Zygmunt Solorz.
The management board of PKO BP, Poland’s largest bank, is set to undergo changes in the first half of February. Three candidates are shortlisted for the position of president: Cezary Stypułkowski, the long-time president of mBank; Sławomir Lachowski, the founder of mBank; and Jacek Obłękowski, the former vice-president of PKO BP and president of Dominet Bank. The Extraordinary General Meeting of Shareholders of PKO BP on February 2 will decide on changes in the composition of the bank’s supervisory board.
BALTIC M&A MONITOR 2024
ONLINE EVENT: 13 February 2024 at 10:00 am – 11:30 am (EET)
Ellex, in collaboration with Mergermarket, is hosting the Baltic M&A Monitor 2024, an exclusive online event on February 13, 2024. The event, set against the backdrop of global challenges, will delve into the thriving M&A trends and prospects in the Baltic region. The agenda includes discussions on M&A statistics, active sectors, private equity activity, and the biggest deals in the Baltics, with insights from key speakers from Ellex and Mergermarket.