The local M&A market had been on a growing trend in the past years, as the economy and private consumption were also growing.
The total value of the local M&A market was much higher last year considering deals whose value has not been disclosed.
Mazars data showed the M&A market grew 61% by number of deals in 2019, and by 45% in value considering disclosed prices alone.
The market had begun 2020 well with new growth outlooks but was stunted by the Covid-19 pandemic.
“After a relatively dynamic start to the year, Romania was among the countries affected by the pandemic and the economy is seen declining by 4% this year according to the latest EBRD forecast. The global health crisis brought uncertainty, broke supply chains and increased pressure on liquidity. The short-term effect on the M&A market was the delay and limitation of deals, many of which have been postponed for the second half of the year or even 2021. The long-term impact remains uncertain,” said Georgiana Ion, senior manager, deal advisory at Mazars Romania.
Among the largest deals signed in the first quarter of 2020 before the outbreak of the pandemic are CPI Property Group’s of a minority stake in Globalworth in a series of transactions, the largest of which amounted to EUR280 million; Brink’s takeover of G4S’ cash operations; and the transfer of 40 onshore oil and gas deposits by OMV Petrom to Dacian Petroleum.
According to the Mazars’s survey COVID-19 and the world of private equity, 79% of respondents said that exit timing for their portfolio companies will be delayed, not surprising considering over 90%of private equity funds expect a drop in revenue. However, despite the financial impact of the pandemic, 44% of funds are yet to see an increase in distressed opportunities.