(Jack Zalium, CC BY-NC)
“You can also expect a reshuffle in the financial sector,” says Marta Kotwis, Key Account Director at FORDATA, a Poznań-based Virtual Data Room (VDR) provider.
“We believe that the sharing economy, IT industry and solutions related to energy efficiency, as well as cloud-based solutions with a strong focus on information security/data protection, for example Virtual Data Room, are the areas that will gain popularity. The use of VDR technology in transactions in Poland has already been increasing month on month,” says Piotr Jankowski, Senior Account Executive at FORDATA.
Despite the modest value of transactions being concluded in Poland (transactions with a value of up to PLN100m are dominant), 2015 was a record-breaking year on the Polish market, with over 220 transactions concluded, an increase of 40 per cent compared to 2014.
The total value of deals hit EUR3.4bn, according to a report compiled by law firm CMS and Mergermarket. However, the total value of completed M&A deals fell from USD11.3bn in 2014 to USD3.4bn in 2015 and is expected to peak at USD7.1bn in 2018, according to Oxford Economics. Deal activity will slow from 2019 to 2020 following a pullback in equity prices, the think-tank continued.
“We expect the number of completed M&A deals to rise from 363 in 2014 to 545 in 2018, then drop to 344 in 2020. Inbound cross-border M&A activity is forecast to drop to 65 percent of Poland’s total completed M&A deal value in 2018, from 78 per cent in 2014,” Jankowski said.
Meanwhile, domestic IPO issuance is projected to rise from USD359.2m in 2014 to USD448.8m in 2016, before peaking at USD1.7bn in 2018.
“Investors are ceasing to consider the CEE as a homogeneous market, pointing their attention to selected markets such as Poland, the Czech Republic or Slovakia. Poland, in particular appeared to be a very active market throughout the last six months,” says Andrew Kozlowski, Partner in CMS. He pointed to sectors such as new technologies, media and communications, industrial-chemical, pharmaceuticals and the medical market, finance services, commodities, BPO and energy market is also active when it comes to M&A transactions.
The largest deal in 2015
However, the statistics are inflated by a handful of big transactions. The largest are the acquisition of 52.7 per cent stake in TVN S.A. by Scripps Networks for PLN2.416bn and the acquisition of PKP Energetyka S.A. by CVC Capital Partners for PLN1.41bn.
“The revival in the M&A market was not accompanied by improved sentiment on the Warsaw Stock Exchange (WSE). The WIG index lost more than 12 percent in the period from January to December. At the same time, the German DAX rose by more than 5 percent, and the US Nasdaq by 6 percent,” Jan Kospin, Director of Navigator Capital, said.
“In the past year, we have witnessed a number of significant and interesting transactions. The largest of these was the acquisition of 52.7 per cent shares of TVN by Scripps Network Interactive for over PLN584m, and then the Polish media giant’s withdrawal from the WSE,” Kospin says.
Some other deals
Other outstanding deals were the acquisition of LW Bogdanka SA by Energy Group Enea for almost PLN350m and a takeover of PKP Energetyka by private equity fund CVC for PLN476m.
Among other interesting transactions were the acquisition by Wielton, a company listed on the WSE and a leading Polish manufacturer of truck semi-trailers and curtains, of a majority stake in Fruehauf Expansion, its direct competitor on the French market. This transaction displays a growing trend of Polish companies expanding into EU markets by taking over their western competitors.
In 2015, the most active vendors in the Polish market were private persons and, on the other side, the most active buyers were PE/VC funds. This may indicate the increasingly common practice of the sale of businesses by their founders, who were faced with the problem of succession.
“One of the key factor contributing to the increase in the number of M&A in Poland is certainly a growing maturity in many sectors of the economy, forcing the consolidation of operating companies,” Kospin says.
UniCredit sells 10% stake sale of Poland’s Bank Pekao
UniCredit, Italy’s biggest bank, has sold 10 percent of Polish Bank Pekao as the lender’s new chief executive officer, Jean Pierre Mustier, seeks to boost capital levels.
The Italian firm sold 26.2 million shares in Poland’s second-biggest lender for PLN3.3bn (USD830m). UniCredit holds 40.1 percent of the bank after the sale. It said the sale was made to “institutional investors” but the name was not revealed.
Poland’s deputy Prime Minister Mateusz Morawiecki said on July that the sale of UniCredit’s Pekao stake was the beginning of a process through which the Polish government would gain control over one of its main lenders. His ruling Law & Justice party has made a “re-Polonization” of banks a priority as it seeks to boost the state’s role in the economy.
UniCredit has struggled to build up capital and meet regulatory requirements, a task compounded by the bank’s complex structure spread across 17 countries. The bank’s common equity Tier 1 ratio, a measure of financial strength, fell to 10.5 per cent at the end of March from 10.7 per cent three months previously. The European Central Bank has asked the lender to maintain a 10 per cent ratio for 2016.
Treasury Minister Dawid Jackiewicz said last month that state-controlled insurer PZU SA and PKO Bank Polski SA, the country’s biggest lender, have the “capacity” for bigger takeovers.
Citigroup, Morgan Stanley, UBS Group and UniCredit, in cooperation with Kepler Cheuvreux, managed the sale, according to terms of the deal.
CRIF acquires Deltavista’s operations in Germany and Poland
CRIF – a global company specializing in credit bureau, business information, and credit solutions – has bought Deltavista’s operations in Germany and Poland.
Deltavista serves banks, telecoms, energy, insurance and e-commerce companies with identification checks, address management tools, automated data consolidation solutions, customizable decision-making models and anti-money laundering solutions.
“By combining CRIF’s information systems and software solutions with Bürgel, acquired this year, and Deltavista‘s information and risk management support systems, we will be able to support our clients to take informed decisions and operate competitively in an increasingly demanding market,” Carlo Gherardi, CRIF President and CEO said.
“Our expansion strategy has been developed through acquisitions and joint ventures and, in some areas like Europe and Asia, we have also established new companies and launched start-ups. In a very competitive market, it is crucial to look for new business opportunities, and provide clients with a comprehensive suite of information, credit and risk management solutions, outsourcing and processing services. We are committed to innovating and giving our clients the ability to arm themselves with advanced solutions, to support profitable business retention and growth,” Gherardi said.
From the beginning of 2016 CRIF enhanced its presence in Germany through the acquisition of Bürgel, one of the leading consumer and business information providers in Germany. Bürgel provides unique and powerful sets of advanced Credit Bureau Information and Risk Management solutions to the market.
Bürgel and Deltavista will operate separately and independently from each other, thus covering different market needs: Bürgel as an information and solution provider, Deltavista as an independent solution provider, and therefore neutral from other information providers.
This transaction will further strengthen CRIF’s industry-leading positioning in the field of banking credit information and risk management solutions in continental Europe as well as enabling the company to exploit synergies with the other local offices already established in those countries.
In 2011, CRIF acquired Deltavista’s and Teledata’s business in Switzerland and Austria in line with its increasing investment plan in the DACH region in order to provide clients with greater added-value services and a comprehensive suite of risk management solutions in German-speaking countries. The successful integration has allowed CRIF to meet different needs and widen its service portfolio to serve financial institutions, companies, and consumers, and to become a benchmark in the e-commerce sector.
MB Aerospace acquires Vac Aero Poland from the Canadian parent company Vac Aero International
International aerospace engineering group MB Aerospace also in July acquired Vac Aero Poland from its Canadian parent company Vac Aero International.
The business, which employs over 100 employees at two sites in Kalisz (central Poland) and Rzeszów (south-east Poland), specializes in providing protective and performance enhancing coatings for aero-engine and industrial gas turbine components.
“We are delighted to acquire the Polish operations of Vac-Aero – now trading as MB Aerospace Technologies Poland – as its extensive range of capabilities and skilled employees will help us broaden our offering to existing customers and the expanding aerospace market in Poland and the surrounding industrial areas of Western and Eastern Europe,” Craig Gallagher, MB Aerospace chief executive officer, said.
„We have inherited a well-established and respected business in Poland with highly skilled employees and a wide range of customer approvals. Working closely with the existing team, we will invest heavily to provide the local market with the capabilities and capacity required to ensure customers continue to receive a world-class service,” Dave Farmery, managing director of MB Aerospace Poland, said.
„After more than a decade of growth and success under Vac-Aero we look forward to starting a new chapter within the MB Aerospace family of companies. The acquisition offers a fantastic opportunity for the business and the planned investment will help us establish ourselves as one of the premier providers of thermal processes and surface coating services in Europe,” Tomasz Krążyński, General Manager, of MB Aerospace Technologies Poland said.