In the Q4 2018, a larger number of transactions were recorded on the Polish M&A market - 62 transactions, compared to the same period last year (59 in the Q4 2017).
Big interest in companies from the SME sector
Decrease in the involvement of foreign investors
Energy sector – expect a lot
In the Q4 2018, a larger number of transactions were recorded on the Polish M&A market – 62 transactions, compared to the same period last year (59 in the Q4 2017). In total, 211 transactions were recorded last year (similarly as in 2017). The largest deal of the last quarter was the acquisition of 37% of Czech Unipetrol shares by PKN Orlen for the amount of approx. EUR 1 billion. More than half of the sellers of shares were private entrepreneurs, which indicates the high attractiveness of Polish companies from the SME sector.
Similarly to the previous quarter, more than 50% of sellers were private entrepreneurs, which proves further attractiveness of Polish companies from the SME sector. In terms of transaction value, in the previous quarter mainly small transactions dominated, followed by Mid-Caps along with large transactions. Among transactions with the disclosed price in Q4 2018, we recorded 11 small transactions, 5 Mid-Caps and 5 large transactions, including 2 worth over PLN 1 billion (including PKN Orlen’s transaction with the highest value).
The fourth quarter of 2018 was more spectacular in terms of the number of transactions compared to the same period in 2017. However, the results achieved confirm the rule that we have been observing for the last 6 years – the fourth quarter closes the most transactions throughout the year. In Q4 2018, 62 transactions were recorded, which is 29% of all processes that took place in 2018 (for comparison in 2014-17 it was 36%, 31%, 30%, 28% respectively).
In the fourth quarter, transactions concluded between Polish entities prevailed. Polish companies accounted for 74% of buyers and 61% of sellers (compared to 68% and 78% in the same period of 2017). The involvement of foreign entities on the buyers’ side has decreased, and its level is only 26% (a decrease of 17% compared to 3Q). European companies are still predominant in this group. The most desired industries are Industry (15%), FMCG (13%) and Retail (13%).
The merger market in the energy sector will definitely be noisy. In accordance with the schedule planned by PKN Orlen in the third quarter of 2019, after obtaining the consent of the European Commission, the procedure related to taking over Lotos will be held. If it comes to a merger, we will have a significant player in the fuel market in Central Europe, and perhaps in the entire European Union. PKN Orlen is currently undergoing due diligence before taking over capital control over Grupa Lotos.
Looking at the situation on the domestic market, we expect in 2019 M&A transactions with a value and number at a level close to the previous year. Low interest rates and a positive economic climate in our region is conducive to further investments. According to economists, everything indicates that the interest rate will not increase next year, and the next quarters of 2019 will bring a continuation of the positive trend.
The publicly available data show that in Q4 2018 as much as 48% of transactions were organized using the Virtual Data Room system (45% of transactions were recorded in the same period last year), which confirms the continued popularity of Virtual Data Room on the Polish M&A markets. This is influenced by the changing preferences of customers towards innovative solutions.
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.