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Report M&A Index Poland 2018

High attractiveness of Polish companies from the SME sector

Private entrepreneurs still sell the most

PE Funds still searching for interesting assets

Poland as one of the most attractive markets in the CEE region

total number of transaction

Situation on 12th December 2018

0 b
the largest transaction (EUR)
1 %
popularity of Virtual Data Room

Alicja Kukla-Kowalska
M&A expert at FORDATA VDR comments

In 2018 we have witnessed 199 transactions on the Polish M&A market, which is by 2,5% less compared to the same period of the previous year.

In the upcoming 2019 interest rates will remain low, which will have a positive impact on the country's economy and investment demand.

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According to the data as at 12.12, in 2018 a total of 199 mergers and acquisitions were carried out in Poland, which is about 2,5% less compared to the same period of the previous year. Although we will not break the record from 2015 (when 247 transactions were recorded), the trend is stable. We expect that by the end of the year the number of transactions may still increase by 10%. More than half of all sellers were private entrepreneurs. Both on the side of the acquired entities and buyers, transactions from the Media/IT/Telecom sector had a large share.

High attractiveness of Polish companies from the SME sector

In terms of transaction value, in 2018, small and medium-sized so-called Mid-Caps (value PLN 100-400 million) prevailed. The largest transaction of the previous year was the acquisition by PKN Orlen of 37% of shares in Czech Unipetrol for the amount of approximately PLN 4.2 billion. Among transactions with the disclosed price in 2018, we recorded 41 small transactions, 12 Mid-Caps and 10 large transactions, including 7 worth over PLN 1 billion. There were no enormous transactions in 2018, as in 2016 (sale of Allegro and sale of the PEKAO block of shares, both worth over PLN 10 billion).

Private entrepreneurs still sell the most

The largest group of sellers in 2018 were private entrepreneurs, responsible for half of the completed transactions. This is related to the observed by us since 2015, increasingly common phenomenon of the sale of enterprises by their founders who faced the problem of succession. As the experts point out, last year, the driving force behind the Polish market was the need to ensure the succession of the family business and to transfer responsibility for building an enterprise for years to the next generation. The market of family enterprises in the coming year will be both for large and small and medium-sized enterprises struggling with the problem of succession. By the date of publication of the report, the largest number of transactions took place in the Media/IT/Telecom sector (18%). On the buyer’s side (excluding the third quarter when the FMCG sector was the most desirable sector) the dominant companies were Media/IT/Telecom – 14% and PE/VC – 11%.

PE Funds still searching for interesting assets

Last year, PE funds were present in every area of the Polish economy – in their portfolios prevailed companies from the Media/IT/Telecom industry and from the industrial sector. Despite high activity in 2017, many funds did not stop at buying and continued acquisitions (acquisition by the Fund belonging to Abris Capital Partners – share package of the Polish ITP company and a large takeover of 38% Unilink shares by the Enterprise Investors Fund). The due diligence process in the abovementioned case was organized using the FORDATA Virtual Data Room system.

Poland as one of the most attractive markets in the CEE region on the M&A market in 2018

According to the law firm Wolf Theiss – Poland was considered one of the most attractive places (just after Austria and the Czech Republic) in the CEE region on the M&A market in 2018 in the sectors of new technologies and Media/IT/Telecom, banking and financial services as well as energy. The M&A market in both Poland and the world has recorded record results for several years. Transactional activity is high and should remain at a similar level in the coming years. The sectors that will definitely be targeted in the upcoming 2019 in Poland are still the following industries: FMCG (food industry, in particular further consolidation of the meat industry), Media/Telecom, Finances, Pharmacy and Health Care.

Market forecasts for 2019

Looking at the situation on the domestic market, we expect in the upcoming 2019 M&A transactions with a value and number at a level close to the passing year. Low interest rates or economic stability in our region is conducive to further investments. According to economists, everything indicates that the interest rate will not increase in the following year. Interest rates will remain low, which will have a positive impact on the country’s economy and investment demand.

Growing popularity of Virtual Data Room systems

The use of Virtual Data Room technology, which guarantees secure access to confidential documents to the other party during the transaction process, is becoming more and more popular, especially after the entry into force of the GDPR. According to publicly available data, 40% of transactions in 2018 were organized using the Virtual Data Room system, including those of prestigious cross-border (compared to 33% in 2017).

About the Authors

FORDATA is a pioneer on the Polish capital market. Based on Virtual Data Room technology, we support our clients in managing documents and communication during complex transactional processes, ie. M&A, IPO transactions, private equity investments, restructurings, projects associated with obtaining financing and privatizations in Poland and other countries of Central and Eastern Europe.

FORDATA systems increased safety and efficiency of hundreds of different types of transactions with a total value of over PLN 35 billion.

Navigator Capital along with Dom Maklerski Navigator (Navigator Brokerage House) is the leading independent financial adviser, specializing in mergers and acquisitions and public and private issues of stocks and bonds.

During 12 years of its market presence, Navigator Capital Group conducted over 70 transactions, of over 6 billion PLN total value.

Through cooperation with international network of advisory firms associated in the Pandion Partners, Navigator Capital effectively handles international transactions.

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