Bogdan Tudorache
The 2020 mergers and acquisitions market in Romania decreased by 6% compared to 2019, amid the uncertainties of the COVID-19 pandemic, while the first five M&A deals of 2020 came from the energy field, shows the PwC M&A Outlook report produced by PwC Romania and D&B David si Baias.
However, given the context, the market value remained at a high level of EUR 4.9 billion, compared to EUR 5.2 billion in 2019 and EUR 5 billion in 2018. The highest value of the M&A market was registered in 2007, of EUR 5.8 billion.
“In the last quarter of last year, we saw very intense activity on the M&A market, aligned with Romania’s surprisingly good economic growth, which was the highest in the EU. However, those last quarter transactions couldn’t compensate for the reduction in the spring and summer, so the total transactions value for 2020 saw a decrease from 2019. The signals from the economy are positive, however, and the return to activity seen at the end of 2020 is expected to continue in 2021, as there is money in the market. Both strategic and financial investors have substantial capital resources, financing is cheap due to still very low interest rates and the time is right for companies that want to expand, consolidate or diversify and transform their business by acquiring resources and new technologies”, said Dinu Bumbăcea, Partner and Advisory, PwC Romania.
According to the PwC analysis, last year’s total of 254 transactions, 18% over the volume recorded in 2019 (215 transactions). The report also reveals an increase in the “below EUR 5 million” segment, both in terms of number and average value of transactions, fuelled by the number of relevant targets, the increasing availability of investors and their interest in that segment.
As has been the case in recent years, more than 50% of the market value was achieved through transactions exceeding EUR 100 million.
“Last year’s star sectors, against the backdrop of the circumstances and changes driven by the pandemic restrictions, were IT&C, industrial products, energy,real estate and health and pharma. Those sectors will remain on investors’ agenda. This year will also be favourable for consolidation by the big players in industries such as energy and construction”, said Dinu Bumbăcea.
The ten most important transactions of over EUR 100 million completed in 2020 were:
- The acquisition of CEZ by Macquarie Infrastructure and Real Assets.
- The acquisition of a 5.3% stake in Electrica SA by Allianz SE.
- Crucea S.A. Wind Farm purchased by Hidroelectrica SA.
- Acquisition of OMV Petrom from Fondul Proprietatea.
- Acquisition of Smart Diesel by DKV.
- Acquisition of Floreasca Business Park by Fosun International Ltd; Zeus Capital Management.
- Acquisition of the NEPI Rockastle portfolio by AFI Group.
- Acquisition of Globalworth Real Estate Investments by CPI Property.
- Acquisition of the fixed Telecom network by Orange.
- UiPath funding round.
- Acquisition of Al Dahra – Agricost by ADQ.
The PwC Romanian M&A Outlook report was based on public information available regarding the transactions signed or closed in 2020. The study doesn’t include transactions that, for various reasons, were not publicly announced as closed in 2020 and those signed in 2019 but not closed in 2020. To estimate the values not publicly available, we used indicative evaluation methods based on comparables, considering the influence of the business model and the respective companies’ industries.
The PwC Romania and D&B David and Baias integrated transactions team is coordinated by Dinu Bumbăcea, Partner PwC Romania, and includes Anda Rojanschi, Partner D&B David and Baias, Andreea Mitiriță, Partner PwC Romania, Cornelia Bumbăcea, Partner PwC Romania, George Ureche, PwC Romania Director, Dragoș Atanasiu, PwC Romania Director, Andreea Bistriceanu, PwC Romania Director, and another 50 transactions professionals.
Over time, the integrated transaction team has assisted over 600 transactions (sell side / buy side) and completed over 70 exit assistance warrants. In 2020, the integrated team of PwC and D&B David si Baias was involved in a significant number of transactions, including the sale of TE-ROX, the acquisition of Partner Coffee Service by Tchibo Coffee Service, the acquisition of a package of shares in Dr. Leahu clinics by the Morphosis fund, the acquisition of the Stăneşti Photovoltaic Park by Electrica and the sale of KIWI Finance.