This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print page

The rising value of deals is luring new investors to Central Europe

Contact: Aleksandra Kolaric
Deloitte
Corporate Communications Director
+385 1 235 1900

Sofia, Bulgaria – July 24 2007 — According to the most recent Deloitte Central Europe Private Equity Confidence Survey, 2007 is a great year for Private Equity in the region. Index figures indicate peaking expectations regarding the market, which are confirmed by activities of private equity funds in the region. Similarly to the record breaking pace of global buyout markets, Central Europe also experienced acquisitions of recognized national brands by private investors in the first half of 2007 (e.g. Oaktree’s acquisition of Stock). “The rising value of deals is luring new funds to enter the market,” said Garret Byrne, the Partner who leads Deloitte’s M&A Transaction Services in Central Europe.

PE CE Confidence IndexThe first half of the year has seen funds raised circa EUR 1.5 billion, including over EUR 500 million for AIG Capital Partners, EUR 263 million for Argus Capital Partners and EUR 250 million for SigmaBleyzer’s Southeast European fund.

Investments in the first half of the year have been buoyant, particularly in the Technology and Telecommunications sector. More significant deals have included AIG Capital Partners’ acquisition of Bulgarian Telecommunications Company (BTC), the acquisition of the Hungarian broadcaster Antenna Hungaria, and Mid Europa Partners’ acquisition of the Baltics telco Bite.

Oaktree Capital Management also added to their portfolio of spirits producers in Central Europe with the acquisition of Eckes & Stock GmbH, which follows their acquisition of Polmos Lublin SE, the Polish spirits manufacturer, in 2006.

Key Findings

The Deloitte Private Equity Central European Confidence index shows high growth expectations for the region. As the index reaches an all time high (see figure 1), we expect record breaking deals activity in 2007. Focus on new investments continues to be the dominant activity of fund managers, as reflected in deal flow and new entries.

A minimum expected market capitalisation at which we would consider exiting a portfolio company via IPO would be (chart)The survey also indicates that booming markets now enable fund managers to hope for rapid investment of their funds, with 58% expecting to be fully invested within two years.

The report indicates that focus on new investments continues to be the dominant activity of fund managers. “78% of managers indicated that they are continuing to focus on new investments. We see the results of this everyday with our professional work focusing on a larger number of significant Private Equity deals,” states Byrne.

IPOs are now considered as a potential exit strategy for smaller and midsize companies. 79% of fund managers believe they will be able to introduce their portfolio companies to the market even with a market cap below EUR 100m (see Figure 2). “The Polish market, in particular, continues to attract private equity exits,” says Byrne.

 

 

For more information or to download the Deloitte Central Europe Private Equity Confidence Survey
please visit
www.deloitte.com/me/private-equity-confidence-july-2007 .

###

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 140 countries. With access to the deep intellectual capital of approximately 150,000 people worldwide, Deloitte delivers services in four professional areas - audit, tax, consulting, and financial advisory services - and serves more than 80 percent of the world’s largest companies, as well as large national enterprises, public institutions, locally important clients, and successful, fast-growing global companies. Services are not provided by the Deloitte Touche Tohmatsu Verein and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names “Deloitte,” “Deloitte & Touche,” “Deloitte Touche Tohmatsu,” or other related names.

About Deloitte Central Europe
Deloitte Central Europe is a regional organization of entities organised under the umbrella of Deloitte Central Europe Holdings Limited, the member firm in Central Europe of Deloitte Touche Tohmatsu. Services are provided by the subsidiaries and affiliates of Deloitte Central Europe Holdings Limited, which are separate and independent legal entities. The subsidiaries and affiliates of Deloitte Central Europe Holdings Limited are among the region’s leading professional services firms, providing services through more than 3,400 people in more than 30 offices in 17 countries.

Stay connected:

 

More on Deloitte