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The total estimated value of M&A transactions (mergers and acquisitions) was 1.8 billion euros in the first half of 2021, according to a PwC Romania analysis; More than 80 announced transactions were recorded. From a sectoral perspective, real estate transactions generated a quarter of the local market of mergers and acquisitions in absolute value, respectively a fifth in volume, and IT continued to remain on the podium of market participants.
The first half of 2021 confirms that the local market for mergers and acquisitions continues its upward trend resumed since the second half of last year, according to the analysis of consultants, quoted by Agerpres.
“Increasing the level of investor confidence, supported by encouraging macroeconomic data, excess liquidity in local and international financial markets, and the promotion of the Bucharest Stock Exchange to emerging market status have significantly boosted transactions in Romania this year,” said Dinu Bumbăcea , Country Managing Partner PwC Romania.
In 59 of the 83 centralized PwC analysis transactions for the Romanian M&A market in the first six months of the year, the buyer was a strategic investor. Investment funds have also increased interest in the local market, with 16 of the announced transactions targeting capital funds.
“Beyond the resettlement of pandemic crisis winners in the competitive landscape of the markets in which they operate, the consolidation and polarization of companies to increase their resilience in crisis have also been an important catalyst for transactions between players in the same industry or from sectors that allow vertical integration and capitalization of synergies “, explains George Ureche, director, M&A leader, PwC Romania.
The Bucharest Stock Exchange has also become a notable platform for attracting capital, the analysis notes. The eight listings (through the initial public offering or private placement) registered during this period, as an alternative to a standard M&A process, and the over-subscriptions in the sales processes prove the growing attractiveness of the local stock exchange. The two most important transactions were the IPO of the carrier TTS and the real estate developer One United Properties, respectively, from June of this year, the two listings accumulating over 100 million euros in terms of attracted capital.
“From a sectoral perspective, real estate transactions generated a quarter of the local market of mergers and acquisitions in absolute value, respectively a fifth in volume. At the same time, IT continued to remain on the podium of participants in the transaction market through a mix of listings, fund raising and mergers & acquisitions, amid the need for financing and consolidation in this market “, says Marina Pavel, manager M&A PwC Romania.
The acquisition of Hermes Business Campus by Adventum Investment Fund Management at a price of over 120 million euros represents the largest transaction in the local real estate market. Transformations in the way employees in large corporations have been one of the factors that have boosted the number of transactions with office buildings, which have become the largest transactions in the sector.
In IT, in addition to the $ 60 million B-series funding attracted by FintechOS, the largest such fund operated since the beginning of the year in Central and Eastern Europe, other IT players such as Gemini Solutions Inc or Metro Systems Romania SRL were the subject of M&A type transactions of over 20 million euros. The consolidation of the market is visible through a series of other small transactions (mostly under 10 million euros), in which entrepreneurial companies are acquired by large international technology conglomerates.
The financial and private health services sectors have maintained their traditional presence in the sectoral top of mergers and acquisitions, with the local operations of Alliance Healthcare Business and the City Insurance insurer representing the largest transactions in these sectors.
Transport, energy, and the consumer goods sectors also recorded a high effervescence, from the desire of the big winners of the pandemic to consolidate their position in the market. We still expect activity in the M&A area to grow in the green energy and logistics sectors.
Global mergers and acquisitions continued to grow in April-June 2021, the fourth consecutive quarter when the value stood at more than $ 1 trillion, according to the PwC Global M&A Industry Trends report. This trend will continue in the second half of the year and in 2022, amid increased demand in the area of technology and innovation and the very large amounts available to investment funds and special purpose procurement companies (SPACs).
“Interest in new technologies and innovations remains at the forefront of transactions and there is an increase in competition between investors and an exponential increase in valuations. But at the same time, we could see an increase in restructuring and transactions among companies still affected by the health crisis, such as airlines, cruise operators, aircraft manufacturers, or cinemas, and which could face new liquidity challenges as governments begin to eliminate support programs, “said Dinu Bumbacea.