“Opportunities will come from several directions: firms that need to exit, entrepreneurs who want to cash in on some of the value created so far or have partners who want to exit, after number of quiet years. Two or three good years will come,” said Laurentiu Ispir, investment director of investment company Oresa Ventures.
The actors on the M&A market felt the mergers and acquisitions activity bounce back as early as 2014 and the cumulated value of deals doubled on 2013. Real estate was the busiest sector, followed by IT.
“We want a new deal this year as well as a portfolio deal, as the economy is recovering and there is greater interest in capital,” said Dan Farcasanu, investment director of private equity firm Resource Partners, which owns World Class fitness centers.
“What we are interested now is investing in development potential. There are more projects now than a year ago. Our areas of interest are retail and distribution. We have several opportunities we are looking at.”
Dan Farcasanu attended the ZF Top Tranzactii (ZF M&A Deals) event organized in partnership with PwC, DLA Piper, Popovici Nitu & Asociatii, Mitel & Asociatii on Tuesday.
The financial sector will continue to be rich in deals involving both bad debt and bank acquisitions.
“Volksbank’s takeover was the biggest deal in terms of asset acquisition in Romania in 2014,” said Omer Tetik, chief executive officer of Banca Transilvania. The bank is interested in new acquisitions, once the takeover has been finalized, he added.
Non-performing loan sales could be even greater this year than those in 2014, said Jonathan Wheatley, director, European Advisory Portfolio Group, PwC Central and Eastern Europe.
NPL deals will amount to more than EUR2 billion this year because Romania’s central bank is putting pressure on banks to clean up their balance sheets, Wheatley added.
Lawyer Silviu Stoica, a partner with law firm Popovici Nitu & Asociatii says another area that shows potential is agribusiness, with the industry undergoing consolidation at the moment.
However, lawyers, executives and entrepreneurs who attended the ZF event on Tuesday agree that although the M&A market will increase this year driven by interest from foreign and local investors, it is still lacking capital inflows from strategic investors.
There have not been any deals worth more than EUR10 million to EUR15 million on average on the local market so far, while the starting price in the West is EUR50 million.
“This year has seen mostly domestic deals, both private equity and strategic, but we still have no fresh capital inflows from foreign strategic investors and this is where the attractiveness of a market is,” Silviu Stoica said.
“Some of the strategic investors decided to stay in Romania, which I see as good news, as a signal that maybe this is not the best time for them to sell here,” he added.
The most promising sectors this year are again retail, real estate, construction and banking, as well as IT, where deals remain relatively low.
Investor interest is growing by the week, with investors calling to inquire about opportunities in Romania, PwC CEE’s Jonathan Wheatley said.
Despite the ebullience on its M&A market, Romania is still lagging behind Poland by number and value of deals.
“What helps us is that Romania and Poland are seen as some ‘islands’ of stability. I expect 2015 to be better than 2014,” Resource Partners’ Dan Farcasanu says.
(English version by Loredana Fratila-Cristescu)