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2017 transactions: M&A market crossed 3 billion euro threshold


For each economic sector, 2017 was the year when there were transactions - mergers and acquisitions (M&A) of hundreds of million euros which meant sometimes historic records. Names like Bitdefender, Sensiblu, Romanian Bank or Polisano changed their owners that year.

The latest studies about mergers and acquisitions this year show that the market crossed the 3 billion euro threshold, the total value being three times higher than  in 2016, with a growth of 20% of the number of transactions.

The purchase of Radisson hotel complex by Revetas Capital for 177.5 million euros was one of the largest transactions in tourism.

In the energy sector there was the purchase of minority packages held by Property Fund in its subsidiaries by Electrica, for 165 million euros.

In the telecommunications sector Digi Communications bought a subsidiary of the Hungarian company Invitel, one of the few international purchases made by a Romanian company for 140 million euros.

In the financial-banking service sector, the purchase of the Romanian Bank (owned by National Bank of Greece) by OTP Bank (Hungary), for 100 million euros, was the biggest bank transaction in the last couple of years. That could be soon exceeded, considering the advanced stage of negotiations by which Transilvania Bank will take over Bancpost.

The technological sector offered the surprised of the year in December: Vitruvian Partners investment fund, based in Great Britain, bought 30% of shares from Bitdefender, the Romanian producer of cyber security solutions. Bitdefender has over 1300 employees and 40% of company sales are in the North American market, one of the areas with the highest increases.

The transaction of the year in private medicine was that by which Medlife took over Polisano hospital and clinics. The price of the transaction is unknown.

In the pharmaceutical sector the transaction of the year was that by which the Czechs from Penta Investments became the owners of Punkt and Sensiblu pharmacies and of distributor Mediplus Exim.

The transaction is evaluated at 350-400 million  euros and is now waiting for the agreement of the Competition Council. A&D Pharma Group, which includes distributor Mediplus Exim and pharmacies Sensiblu and Punkt, is controlled by Walid Abboud, Roger Akoury, Ludovic Robert and Michel Eid. The company is the leader of the meidcine distribution market and the second player in the retail market with Sensiblu and Punkt networks. Together, the two have businesses of 5.7 billion lei (1.3 billion euros) and a gross cumulated profit of 152 million lei. The Czechs from Penta Investment made the move by means of the pharmacy chain Dr Max, active in several markets - Czech Republic, Slovakia, Poland, Serbia and Italy. Dr Max already operates 31 pharmacies in Romania by taking over Arta pharmacy network in June.

In the sector of office and business centre market, the transaction of 2017 was that by which Paval brothers, the shareholders of Dedeman, bought for 164 million euros the office buildings of AFI Park in Bucharest. Dragos Paval, the entrepreneur who controls Dedeman network, signed with the Israelis from Africa Israel the accord for the purchase of office buildings AFI Park 1-5, considered the biggest transaction ever made in the Romanian office market. Dedeman took over AFI park 1,2 and 3 for 86.5 million euros.

In 2017 there was a remarkable transaction in the naval sector: Damen Shipyards Group signed a contract with Daewoo Shipbuilding & Marine Engineering (DSME) for the purchase of its majority share at Daewoo Mangalia Heavy Industries (DMHI). “Mangalia Shipyard, located on the eastern Black Sea coast has an area of 980,000 square meters, three dryers 982 m long. Docks will help Damen satisfy the largest ships and naval constructions. That movement represents a strategic completion of the present Damen portfolio,”said the company. Damen already owns a shipyard in Romania, at Galati, the largest unit of the group at present. According to Damen Shipyards Group, the competition authorities in Romania have already approved the transaction. Daewoo Shipyard was set up in 1997 as a joint venture between Daewoo and 2Mai Mangalia Shipyard.

In the field of mobile phone applications, the surprise of the year was the 10 million euro transaction by which the founders of Clever Taxi sold the mytaxi developing company backed by Daimler. Over 40 million taxi rides were ordered in 6 years through Clever Taxi in 20 Romanian towns. “It is an 8 figure transaction in euro. The mytaxi developer bought all shares from Clever Tech, the owner of Clever Taxi,” said Mihai Rotaru, co-founder and CEO of Clever Tech. At the moment of the sale, shareholders of the Romanian company were Mihai Rotaru -29.8%, Alexandru Dumitru -29.8%, Bestjobs Recrutare (Calin Fusu)- 34.1% and Andrei Pitis-6.1%. Taking into account the announced transaction value, each of the two founders obtained 3 million euros, Fusu’s company a little over 3 million euros and Andrei Pitis about 1 million euros.

For 2018, analysts expect more mergers and purchases, when business opportunities will be bigger and more urgent in point of need to be capitalised.