The rising value of deals is luring new investors to Central Europe
Contact: Aleksandra Kolaric
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.
The 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.
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.
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 .
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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.