Deloitte Analysis: 2017 sets new record for transactions over 100 million euros

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Deloitte Analysis: 2017 sets new record for transactions over 100 million euro

17 January 2018

The M&A market in Romania has reached 3.8 billion EUR in 2017, according to public sources and disclosed transactions, an analysis performed by Deloitte Romania has revealed. Overall, by adding all transactions with undisclosed value, the total market adds up to between 4 and 4.6 billion EUR, 15% higher compared to 2016, according to Deloitte estimates.

“The M&A activity continued to grow in 2017 but more remarkably was that the number of transactions reaching between 100 and 500 million EUR reached 15, setting a record performance of the past ten years,” said Ioana Filipescu, Deloitte Romania M&A Partner.

The largest transactions in 2017 were:

1.    The acquisition by Enel of a package of nearly 14% of E-Distribution Muntenia and Enel Energie Muntenia represents the largest transaction of 2017 and was driven by SAPE's decision to exercises the put option right, the price being agreed by the Paris Court of Arbitration (401 million EUR)

2.    The acquisition of A&D Pharma by the private equity fund Penta Investments was published at the end of 2017 and it was the largest transaction in the pharma retail and distribution sector (deal value not officially announced)

3.    The transaction by which Banca Transilvania acquired Bancpost, ERB Retail and ERB Leasing  stands as the largest transaction in the banking sector in recent years (deal value not officially announced)

4.    The takeover of Ecopack and Ecopaper by DS Smith (208 million euros)

5.    The listing on the Bucharest Stock Exchange of telecom company Digi was the highest initial public offer made by a private company on the Bucharest Stock Exchange (193 million EUR)

6.    The announced acquisition of the local subsidiary of Piraeus Bank by JC Flowers investment fund marking the first deal on the Romanian banking market for the fund (deal value not officially announced)

7.    The largest deal in the hotel industry that took place last year was the acquisition by Revetas Capital and Cerberus of a hotel complex including Radisson Blu and Park Inn hotels (over 165 million EUR)

8.    The acquisition by Electrica of the shares held by Fondul Proprietatea in - Electrica Distributie Muntenia Nord, Distributie Transilvania Sud, Distributie Transilvania Nord, Electrica Furnizare (165 million EUR)

9.    The takeover of the Japanese car maker Takata Corporation by Key Safety Systems involved Takata’s local facilities in Arad (two) and Sibiu (the transaction value of 1.58 billion USD globally)

10. The association between Atterbury Europe and Iulius Holding, the Iullius malls operator

 (value not officially disclosed)

11. The acquisition by which Vitruvian Partners became one of the shareholders of Bitdefender, the largest Romanian software provider, by acquiring 30% stake into the company was the largest IT&C transaction last year (Bitdefender's value was set at over 600 million USD)

12. The takeover of Hungarian operator Invitel Tavkozlesi by Digi Hungary (140 million EUR)

13. The agreement between Globalworth real estate investment company and Griffin Premium RE. N.V for the acquisition of a majority stake in the Polish company (value not officially notified)

14. The announced acquisition by Chimcomplex SA Borzeşti of some of Oltchim's assets (127 million EUR)

15. The transaction by which OTP takes over Banca Romaneasca, which awaits the NBR's approval (value not officially announced)

Overall, there were 105 announced transaction in 2017, including those whose value was not formally disclosed. When compared to the previous year, the number of transactions increased by 15%.

In terms of sector, energy occupies first place, followed by financial services. There was also an increased dynamics in sectors such as and TMT (Technology, Media, Telecom), industry and healthcare services.

Throughout 2017 investment funds showed high level of activity, successfully closing a total number of 13 acquisitions, the largest of which was the takeover of A&D Pharma by Penta Investments.

"We noticed a much greater interest from private equity players in Romania, an interest shown by both present players and newcomers. Part of this eagerness showed up in transactions, but we expect 2018 to bring new private funds to Romania, which we have seen active in deals since last year," said Ioana Filipescu.

"We anticipate that the M&A activity will remain high in 2018, sustained by the favorable macroeconomic context where companies, whether national or foreign, have more funds available for investment. We are witnessing a propitious moment for M&A activity, both from buyers and sellers perspective. This represents a window of opportunity that the business environment still benefits from. We anticipate that consolidation will continue in the banking and financial services sectors, and we expect new transactions in TMT. Moreover, we expect to see even more transactions between Romanian companies that will want to consolidate the segments in which they operate. “