Merger and acquisitions dealmaking (M&A) in CEE was back around pre-COVID-19 levels in the first half and a busy second half is expected, Mergermarket, the data and intelligence agency, reported last week.
The findings of the survey show that the strong recovery in dealmaking seen this year has continued, as private equity firms and other investors look to use the huge amount of dry powder they have accumulated.
According to its data, in CEE (excluding Russia) in H1, there have been 268 deals announced with a total deal value of €12.5bn, which is the highest deal volume since 2016 and the biggest deal value since 2015. The numbers compare with 200 recorded deals in the same period last year, which totalled €8.2bn in deal value.
Mergermarket said the first half was particularly strong in the mid-market and smaller-ticket segment.
It commented that the year so far had been like no other because of the pandemic, volatility, the breakneck speed of digitalisation, and also the tidal wave of money, including strong equity capital and credit markets.
For Poland, Mergermarket reported that the M&A market will continue to see above-average levels of activity in 2H21, though a fourth COVID-19 wave might dampen the mood.
In 1H21 there were 86 deals, compared with 48 in the same period in 2020, with a disclosed deal volume of €6.47bn (€5.14bn in 1H20), which was the busiest six-month period since 4Q18-1Q19. Mergermarket said there was a general appetite for wider tech, especially e-commerce, as seen with the recent PLN1.5bn (€252m) investment into online shoe retailer eobuwie by Cyfrowy Polsat and A&R Investments and later Softbank.
In the Baltic states there were a total of 58 deals in 1H21, with a total disclosed value of €1.4bn, compared with 35 deals during 1H20 valued at €0.5bn, according to Mergermarket data. Key deals so far include the disposal of Fortum’s energy assets in the Baltics, and the €250m Series F round of Lithuania’s Vinted.
Mergermarket said activity in the Baltic states is especially high in the mid-to-lower M&A market level, fuelled by capital availability, including from local family offices, VCs, PEs, investors’ willingness to invest but also inflation concerns, high levels of corporate and consumer confidence, and strong performance of local economies.
In the Czech Republic, the number of announced deals in 1H21 was 37, similar to the 39 recorded in the same period last year, with a total value of €854m (€1.6bn in 1H20), according to Mergermarket data.
The rise in activity has largely been driven by a number of transactions kicking off again after being put on hold due to the uncertainty last year, and due to an abundance of capital to invest. Local players, including investment groups and family offices, are playing an increasing role in deal activity.
Deal activity is in full flow and is anticipated to be on a par with last year or better. Sectors seeing particularly strong activity this year include IT, e-commerce, services and consumer goods.