Romania saw a growing number of big transactions in 2017 in all local business sectors. Banking, healthcare, industry, IT and real estate were the sectors where the most important deals took place.
Consolidation in the Romanian banking sector continued in 2017 as Greek banks decided to withdraw from the local market. As a result, three important banks that were part of Greek groups were sold this year. The first transaction was OTP Bank’s takeover of Banca Romaneasca from National Bank of Greece (NBG), a deal whose value has been estimated at some EUR 100 million. However, the deal of the year was again signed by local Banca Transilvania, which reached an agreement to buy Bancpost and the other local subsidiaries of EFG Eurobank. The value of this transaction, which is still pending approval, hasn’t been made public, but is estimated at some EUR 230-250 million, according to mergers & acquisitions journal Mirsanu.ro. When finalized, this transaction will take Banca Transilvania very close to market leader BCR. In December, Greek group Piraeus also announced the sale of its local subsidiary to US investment fund JC Flowers, the first international player to enter the local banking sector after many years.
Pharma and healthcare services
The pharmaceutical and private medical services sector also saw several big deals in 2017. The deal of the year was the takeover of local pharmaceutical group A&D Pharma by Czech-Slovak investment fund Penta Investments. The deal is estimated at some EUR 350-400 million and will result in a new leader on the local pharmaceutical market. The Dr. Max pharmaceutical network, controlled by Penta Investments, also bought several pharmacies in Romania earlier this year. In the private healthcare sector, consolidation continued in 2017, as the top three players MedLife, Regina Maria and Medicover continued to buy smaller competitors. Market leader MedLife, however, made the biggest acquisition, namely the takeover of the Polisano hospital and clinics network for an undisclosed sum. At the beginning of the year, MedLife also bought the Anima clinics, founded by investors involved in the A&D Pharma business.
Industry also made the headlines with big transactions this year, some of which were quite surprising. One of the biggest deals of the year was the purchase of the Ecopaper Zarnesti and Ecopack Ghimbav paper factories by British group DS Smith from local investor Vladimir Cohn. The total value of this deal, including debt amounts to EUR 208 million. Dutch ship builder Damen also made a surprise acquisition, taking over a majority stake in Romania’s biggest shipyard, Daewoo Mangalia Heavy Industries. Romanian investor Stefan Vuza won the tender to buy most of the assets of insolvent chemical plant Oltchim, aiming to build Romania’s biggest chemical group. Another big transaction in the industrial sector was German group Xella’s takeover of local brick producer Macon from Polish fund Enterprise Investors.
The biggest deal in the energy sector was signed by state-controlled electricity holding Electrica, which bought the minority stakes held by investment fund Fondul Proprietatea in its subsidiaries for EUR 165 million.
The IT sector, the rising star of the Romanian economy, also had several important transactions in 2017. The biggest deal involved Bitdefender, the most valuable IT brand built in Romania. British fund Vitruvian Partners bought a 30% stake in Bitdefender from local fund Axxess Capital in a deal that valued the whole company at some USD 600 million. Two Romanian tech startups were also sold in 2017 for big money. Smartwatch producer Vector Watch was acquired by American smart gadget producer Fitbit and local taxi app Clever Taxi was purchased by German group Daimler.
Real estate continues to be a hot sector for investors. Traditional investors such as Globalworth, NEPI, CTP, P3 and GTC were joined by new investors this year. The deal that made the most headlines was Israeli group Elbit Imaging’s sale of the Radisson hotel complex in Bucharest, which bought a new investor on the local market, namely US fund Cerberus. The deal’s total value was close to EUR 170 million. Another big transaction was signed by Ducth group Atterbury, which bought half of the Iulius Mall network developed by local investor Iulian Dascalu. Globalworth continued to invest heavily in Romania, taking over the Dacia warehouse near Pitesti and the third building of the Green Court office project in Bucharest. Logistics developers CTP, P3 and WDP continued their fast expansion by buying existing warehouses and land for new developments. On the residential segment, developers continued to buy land for new projects with local Impact being among the most active investors.
The biggest failed deal in the real estate sector was the sale of the AFI Park office complex. Local DIY retailer Dedeman, owned by Romanian investors Dragos and Adrian Paval negotiated the takeover of the five office buildings from Israeli group AFI Europe but backed away from the deal in the last moment.
In retail, the top transaction was Kingfisher’s takeover of the Praktiker DIY store network from Romanian-Turkish investor Omer Susli. French retailer Auchan also bought a small network of supermarkets in Bucharest while competitor Carrefour bought a home delivery app.
International deals by Romanian companies
The number of international acquisitions made by Romanian companies also increased in 2017. The biggest deal was local telecom operator Digi’s takeover of a telecom company in Hungary. Banca Transilvania bought a bank in Moldova and state-owned gas transporter Transgaz made a bid for a Moldovan gas pipe operator. Romanian industrial group Teraplast also bought a factory in Serbia.
IPOs and big transactions on the stock market
The Bucharest Stock Exchange also saw some action in 2017 as several private companies decided to draw capital from the stock market. The biggest listing was that of telecom group Digi Communications, which raised EUR 190 million in the biggest private listing ever carried on the local capital market. Restaurant operator Sphera Franchise Group, the owner of the KFC, Pizza Hut and Taco Bell franchises in Romania, also raised EUR 62 million in a local IPO.
Andrei Chirileasa, [email protected]