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Intense M&A activity in 2018 in Romania – Deloitte analysis

de Dordia Tereza , 14.1.2019

Ioana Filipescu, Corporate Finance Partner, Deloitte Romania

The Romanian mergers and acquisitions market reached nearly EUR 2 billion in 2018, according to a Deloitte Romania analysis based on public sources and transactions with reported value. Taking into account transactions whose value was not communicated, the total merger and acquisitions market in Romania is between EUR 3.8 and 4.3 billion, according to Deloitte estimates, slightly below the level of the previous year.

We witnessed a slight decrease in M&A activity in 2018, after a particular context in 2017 with a record value of transactions between EUR 100 and 500 million. In spite of this evolution, the market remains at a robust level, specific to a year of economic growth. The premiere of 2018 was represented by the funding through which Romanian start-up UiPath attracted strong global investment funds and became the first unicorn in the IT sector in Romania,” said Ioana Filipescu, Corporate Finance Partner Deloitte Romania.

In 2018, 14 transactions were announced with a reported or estimated value of at least EUR 100 million. In total, the number of transactions calculated by Deloitte was 96 in 2018. The average value of transactions with reported value was EUR 50 million.

The largest transactions announced in 2018 were:

  • the acquisition of Liberty Global shares made by Vodafone in Germany, the Czech Republic, Hungary and Romania (unlisted value for Romania);
  • the acquisition of Zentiva Group by Advent International, including Zentiva SA Romania, the former Sicomed (estimated at EUR 287 million by applying EBITDA multiple of the transaction to Zentiva SA results in 2017);
  • the sale of Agricost to Al Dahra Group, the largest transaction in agriculture in Romania (value: EUR 200 million);
  • the acquisition of The Bridge office project from Forte Partners made by Paval brothers (unlisted value);
  • the acquisition of a 7.5% stake in Romanian start-up UiPath, specializing in the development of automation solutions for internal processes using robotics, by a consortium of investors headed by Sequoia Capital, which led the company to a EUR 2.6 billion (value: EUR 194 million). This was the second funding attracted in 2018 by UiPath, six months after the first round;
  • the takeover of Oregon Park office project in Barbu Vacarescu area, Pipera, by Lion’s Head Investment, which makes its first acquisition in Romania (unlisted value);
  • the acquisition of Farmexim distributor and Help Net network by Phoenix Group (unlisted value);
  • the sale by SIF Oltenia of the 6.3% stake in BCR to Erste Group Bank (value: EUR 140 million);
  • the first funding attracted by UiPath, granted by Accel, capital G and Kleiner Perkins Caufield & Byers (EUR 124 million). Following this transaction, UiPath became the first Romanian unicorn – a start-up whose valuation exceeded one billion dollars;
  • the sale of Urgent Cargus courier firm by Abris investment fund to Mid Europa investment fund, the largest transaction in the field so far (unlisted value);
  • ArcelorMittal Galati takeover by Liberty House, together with the plants in Macedonia, Italy and the Czech Republic (unlisted value);
  • the acquisition of a 23% stake in Alro aluminium producer in Slatina by Paval Holding, a vehicle owned by the Paval brothers (value: EUR 108 million);
  • the purchase of Betty Ice ice-cream manufacturer by Unilever at the end of a competitive bidding procedure (unlisted value);
  • the acquisition of Sun Plaza shopping centre, Novotel Hotel and Sun Offices by Immofinanz real estate developer (unlisted value).

The activity of private equity funds remained at a high level in 2018 with 12 transactions announced and Zentiva takeover from Advent International (including Zentiva SA local manufacturer) was at the top of the ranking. The total value of acquisitions made by the funds was over EUR 1.1 billion, according to Deloitte estimates.

The interest of financial investors for Romania has maintained, as Romanian companies continued to grow, and the macroeconomic fundamentals did not change significantly compared to the previous year,” added Ioana Filipescu.

In 2018, Deloitte’s Corporate Finance team assisted Farmexim / Help Net shareholders in the sale made to Phoenix, Oresa Ventures in selling Fabryo dyes manufacturer to AkzoNobel, also assisted Animax shareholders in the sale to TRG as well as IKB shareholders in the sale to BNP Paribas.

Together with experts from Deloitte UK and Reff & Associates, the Corporate Finance team has advised Chimcomplex SA Borzesti in obtaining funding to support the takeover of Oltchim SA assets, a company in insolvency. Following this transaction, the largest chemicals producer in Romania will emerge.

M&A market in Romania in 2018:

  • market value (transactions with a listed value): EUR 1.9 billion;
  • the average value (transactions with a listed value): EUR 50 million;
  • market value (including unlisted transactions – Deloitte estimate): between EUR 3.8 and 4.3 billion;
  • number of transactions (including those whose value has not been officially communicated): 96;
  • number of transactions with a reported or estimated value of at least EUR 100 million: 14

Annual evolution of M&A market (billion euro)

Note: The chart includes transactions announced in the relevant period with a reported value of more than EUR 5 million. Historical figures are updated to the value of transactions resulting from the latest available information.

Deloitte Romania coordinates a multidisciplinary M&A practice with a holistic approach that includes business lines such as M&A Consulting, Transaction Support services, Tax Advisory and Legal Advisory. Deloitte professional teams can cover all relevant aspects of a transaction.

Deloitte provides at the global level audit, advisory, legal services, financial and risk management advisory services, tax advisory services and other related services to public and private sector clients from various industries.

Four of five Fortune Global 500® companies are Deloitte clients through its global network of member firms operating in over 150 countries and territories and providing international resources, local insights and top-quality services to address complex business challenges.

Deloitte Romania is one of the largest professional services companies in our country and provides, in cooperation with Reff & Associates SCA, audit services, tax advisory, legal services, management and financial consulting, risk management services, technology service solutions and consulting as well as other related services through over 1,200 professionals.

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