Over the next 5 to 7 years, the largest number of transactions will be sealed in agriculture, where the price of land is still low, and the energy sector, where there are sellable projects.
Moreover, the state plans to sell on the stock exchange several stakes in the energy companies it controls, which will bring it more liquidity. The 97 largest transactions sealed in the last year have an estimated value of around EUR1.5 billion, according to the Top Transactions yearbook.
The mergers and acquisitions market saw a slight rise in the past year. However, deals worth above EUR100 million can still be counted on one hand, considering that investors paid such amounts only for Azomures (AZO.RO), Omniasig, stakes in BCR and Fondul Proprietatea (FP.RO).
We will see more fizz on the transactions market, especially in agriculture, energy, and even on the stock exchange, considering that “the light at the end of the tunnel” is starting to show in 2012, say Bogdan Stoica, associate lawyer at Popovici Nitu&Asociatii, Ovidiu Sandor, CEO of Moda Tim Invest and Dan Weiler, capital market consultant, who attended the “ZF Dinner – Secrets of the biggest transactions” event.
“I can’t say what others should do in order to succeed in business, but I can say what helped me. There were three factors: my family, my studies and my experience abroad,” says businessman Ovidiu Sandor.
His sale of office building project City Business center in Timisoara was the biggest transaction by a Romanian entrepreneur.
A top 10 of the largest transactions sealed in the past year includes two real estate deals, the sale by Ovidiu Sandor of City Business Center project in Timisoara and the acquisition by Austria’s Immofinanz of a 70% stake in real estate developer Adama.
Ovidiu Sandor, the main shareholder of Moda-Tim group, sold South Africa’s NEPI a project made up of three completed office buildings and another two buildings in various stages of development in Timisoara, in a deal estimated at EUR80 million.
“I managed to seal this transaction because I made sure I created the right concept, the amount of offices delivered to the market was correlated with demand. (…) Banks and consultants were pushing me to build the project bigger and faster, but I did not get tricked into it. I did not develop a lot all at once because I would have killed the project.”
As for transactions in agriculture, another sector with potential to grow, Bogdan Stoica, associate lawyer at Popovici Nitu & Asociatii, says agriculture will also see transactions over the next 5-7 years.
“In 2012 we will definitely see more transactions in agriculture,” he said.
Dan Weiler, executive manager in charge of corporate and investment banking at the BCR, says transactions are sealed on a win-win basis and that very few M&A consultants are used in Romania. He says two things are lacking in Romania: good companies and liquidity.
However, Weiler says he is optimistic about 2012, which got off to a good start. He also says prices are not yet low enough for transactions to be sealed. “The prices of 2007 and 2008 still linger in the seller’s mind.”
“I think on the transactions market the surprises will come from the solar sector, an interesting sector. Industry sector companies will also attract investors.”
(English version by Daniela Stoican)