M&A Index Poland 2Q 2015

Set sail for success

M&A Index Poland2Q 2015

Prepared by Navigator Capital & Fordata

www.fordata.pl/en

Experts’ comments to the 16 edition

of the report can be found on the website:

blog.fordata.pl

th www.en.navigatorcapital.pl

Introduction

In the first quarter of 2015, the number of M&A transactions reached 54 and was slightly

lower than in the previous quarter (54 vs. 50). The most popular targets were media,

telecommunication and IT companies. Below we have attached description of the most

considerable deals.

(27th April) AGC Automotive Europe SA, the Belgium-based manufacturer and supplier of

automotive glass and car glazing has agreed to acquire NordGlass Sp. z o.o., complemen-

tary in terms of business geography, Poland-based company that manufactures

windscreens from Enterprise Investors, the Poland-based private equity firm. NordGlass has

been present in the private equity fund’s portfolio since 2007 and was originally purchased

for ca. EUR 22m. During the transaction FORDATA Virtual Data Room system was used.

EUR 80m

(30th April) British private equity fund AnaCap Financial Partners has agreed to acquire

99.6% shares of FM Bank PBP (the remaining 0.4% shares belong to Mr. Piotr Stępniak) from

a Poland-based private equity fund Abris Capital Partners. The process of sales of FM Bank

was forced by the Polish Financial Supervision Authority (KNF), which stated that the

previous shareholders do not guarantee the bank’s prudent and stable management.

Among other potential buyers i.a. Alior Bank and Bank Ochrony Środowiska were

rumoured.

(30th April) Cargill Poland Sp. z o.o., the Poland-based of a global enterprise specialized in

the feed market, has agreed to acquire 100% shares in Dossche Sp. z o.o., the Poland-

based subsidiary of international company Dossche Invest. Cargill Poland already has track

record in M&A in the Polish market after 2011 acquisition of Provimi, a feed manufacturer.

M&A Index Poland, Q2 2015by Navigator Capital & Fordata | July 2015

Selected transactions

Total number of transactions*

54 (2Q 2015)

The largest transaction**

EUR 396m(Acquisition of 25.3% stake in Alior Bank S.A.

by PZU S.A.)

* based on public data

** among transactions with disclosed prices

TARGET BIDDER SELLER VALUE




About the report:

The M&A Index Poland report is a position

that has become a permanent fixture in the

calendar of the industry summaries in Poland.

The reports are prepared quarterly by a consul-

ting firm Navigator Capital and FORDATA,

a leader in the field of IT solutions which

support M&A transactions.

These reports are created to monitor the

dynamics of Polish M&A market and to demon-

strate the most interesting transactions.

For the past five editions we are also focusing

on the frequency of use of the Virtual Data

Room during M&A processes in Poland.

Nord GlassAGC Automotive

EuropeEnterprise Investors

FM Bank PBPAnaCap Financial

PartnersAbris Capital Partners n/a

Dossche Cargill Poland Dossche Invest n/a

(12th May) Polish private equity fund Abris Capital Partners has agreed to acquire shares in

S.C. Pehart Tec, Romania-based manufacturer of toilet paper and other hygiene products.

The sellers were EBRD and MG Tec Group, a holding company of the Company’s founder

and CEO, Mr. Ioan Tecar. EBRD has invested ca. EUR 6m in the Company in 2009. Mr. Ioan

Tecar is going to remain the Company's shareholder and president of the management

board.

(19th May) Aviva, one of the major insurance groups acting on the Polish market, has

agreed to acquire Expander Advisors – a leading entity in the individual financial advisory

business. The seller was Innova Capital, a private equity fund which acquired 60% stake in

the Company in 2007 from GE Money for ca. EUR 40m and the remaining 40% stake in

2009 for an undisclosed consideration. The transaction is financed by Aviva’s own funds.

n/a

(20th May) PKP Cargo obtained approval of Czech antimonopoly authority (as the last

condition precedent) to acquire 80% shares in Advanced World Transport (AWT), the

second-largest train operating company. In 2013 AWT Group delivered 12 million ton of

cargo in almost all CEE markets. The deal will significantly increase the PKP Cargo share in

the Czech market and in the other CEE markets.


(8th May) Netia S.A., a company listed on WSE operating in the telecommunication

business, has agreed to acquire 100% shares of TK Telekom from PKP Group. After the

transaction, Netia will significantly increase its asset base as the target’s assets include ca.

7.5 thousand km of fiber network. The deal value equals to 5.2x EBITDA of the target

company for 2014.

By sector

Transactions with the participation of Polish

companies grouped by sectors

(by number of transactions)






MEDIA / IT /TELEKOM

INDUSTRY

FINANCIALSERVICES

CONSUMERGOODS

28%

12%

10%10%

PE / VC

MEDIA / IT /TELECOM

INDUSTRY

FINANCIALSERVICES

PRIVATE INVESTORS

PE / VC

CONSUMERGOODS

INDUSTRY

TK Telekom Netia PKP ca. EUR 54m

S.C. Pehart Tec Abris Capital Partners

MG Tec Group; The European Bank for

Reconstruction and Development

EUR 114m

Expander Advisors Aviva Innova Capital

Advanced World

Transport (80% shares)PKP Cargo Zdenek Bakala,

The Bakala TrustEUR 103m

SELLER (%)

TARGET (%)

BIDDER (%)

20%

17%

11%11%

20%

13%

13%9%

(30th May) Powszechny Zakład Ubezpieczeń S.A. has acquired a 25.3% stake in WSE-listed

Alior Bank S.A., a dynamically developing retail and commercial bank. The transaction price

was fixed with a minor discount to the WSE stock price on the closing date. The payment

will be divided into 3 tranches. PZU aims to develop in the Polish banking segment and

distribute its products by the new sales channel.

EUR 396m

(2nd June) Porr Bau GmbH, an Austria-based construction and engineering company has

agreed to acquire Bilfinger Infrastructure, the Polish subsidiary of a German listed construc-

tion company, Bilfinger SE. Bilfinger Infrastructure is specialized in i.a. construction works for

energy sector, industry and infrastructure. In 2014 Bilfinger Infrastructure revenues

amounted to ca. EUR 170m and the company employed ca. 800 FTEs.

EUR 22m

(19th June) Sfinks Polska S.A., a WSE-listed entity operating restaurant chains Sphinx,

Chłopskie Jadło and WOOK, has signed a letter of intent with a company operating a

pizzeria chain Da Grasso concerning the purchase of 100% stake in Da Grasso. The LoI

secures exclusivity for the parties and determines the major consideration, including the deal

value. The company after merger will operate more than 300 restaurants.

(22nd May) Wielton S.A., the leading Polish truck trailers and semitrailers manufacturer has

acquired a 65.3% stake in Fruehauf Expansion, a French-based entity of similar operations

profile. The sellers were a private equity fund MBO Partenaires and individual investors. The

remaining shares belong to Mr. Francis Doblin, the Company’s CEO. The acquisition is partially

financed by bank consortium of BGŻ BNP Paribas and BGK. Navigator Capital was a financial

advisor to Wielton.

Authorised Adviser

Business Partners





Navigator Capital

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.

In recent years Navigator has completed over 35

transactions. Navigator Partners’ market experience

includes deals worth over PLN 6,2b (EUR 1.6b).

Through cooperation with international network of

advisory firms associated in the Pandion Partners,

Navigator Capital e�ectively handles international

transactions.

Navigator Capital and Dom Maklerski Navigator create

a strategic alliance with Biuro Maklerskie Banku BPH

(Brokerage O�ce of Bank BPH) concerning services

related to shares (IPO & SPO) and debt instruments

(bonds) public issues.

FORDATA (formerly Datapoint)

FORDATA is a pioneer on the Polish capital market.

Based on Virtual Data Room technology, we support

our clients in managing documents and communica-

tion during complex transactional processes.

We support the largest 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 e�ciency of

hundreds of di�erent types of transactions with a total

value of over PLN 32 billion.

FORDATA services are used by the industry leaders in

Poland and abroad, including Enterprise Investors, NFI

Empik, ZELMER, Bank DNB, BOŚ Bank, Polimex

Mostostal, Budimex, PKO BP Brokerage House, Deloitte

Advisory, E&Y, PwC, KPMG Advisory, Śnieżka, Enea, JSW,

Espirito Santo Investment Bank and many others.

Contact

Bartosz Krzesiak Manager

e: [email protected] t: +48 22 630 83 26

Navigator Capital S.A.

ul. Koszykowa 54, 00-675 Warszawa, Poland

t: +48 22 630 83 33 f: +48 22 630 83 30

e: [email protected] www.en.navigatorcapital.pl

Marta Kotwis Key Account Director

e: [email protected] t: +48 508 259 349

Fordata Sp. z o.o.

(formerly Mergers Net Sp. zo.o. I Datapoint brand)

ul. 28 Czerwca 1956 r. nr 406, 61-441 Poznań, Poland

t: +48 61 660 15 10 e: [email protected] www.fordata.pl/en



Fruehauf Expansion

(65.3% shares)Wielton MBO Partenaires EUR 9.5m

Alior Bank

(25.3% shares)PZU Carlo Tassara SpA

Bilfinger Infrastructure Porr Bau Bilfinger

Da Grasso Sfinks - ca. EUR 13m

(30th June) Dr Gerard Sp. z o.o., one of the Polish leaders in biscuit manufacturing and a

portfolio company of Bridgepoint private equity fund, has acquired 100% shares in Artur Sp.

z o.o., a Polish manufacturer of biscuits and salty snacks. Dr Gerard revenues after the

transaction are expected to increase by ca. 20%. Navigator Capital was a financial advisor to

Dr Gerard in the transaction process.


Artur Dr Gerard ZPC Mieszko n/a

Marta Kotwis

Key Account Director,

Member of the Board

FORDATA sp. z o.o.

(formerly Datapoint)

The second quarter of 2015 on the Polish transactional scene is a continuation of a good trend initiated at the end

of 2014. In total, in the period from April to June there were 54 transactions, which is a 10% increase compared to

Q1 of 2015 and 68% increase compared to Q2 of 2014. The object of the acquisitions were mainly companies from

the media, telecommunications and IT sectors. PE/VC Funds were dominant among buyers (up to 20% of all deals).

Strategic investors, as well as PE funds were dominant among sellers (31% and 19% of all the transactions accord-

ingly). Abris Capital Partners, Avallon, Enterprise Investors and Resource Partners were among the most active funds.

Among the transactions with disclosed price, those with a value of less than PLN 100 million were dominant,

which confirms a trend that we noticed already in the last quarter of 2014. A transaction worth noticing is undoubt-

edly the purchase of shares of Alior Bank by PZU for EUR 396 million and the fact that Enterprise Investors sold AGC

Automotive Europe to the Belgian-based automotive glass manufacturer Nord Glass for EUR 80 million.

In accordance with our expectations from the beginning of the year, we can see an increased transaction involve-

ment of FIZ and a large involvement of commercial real estate funds.

A good trend in the number of transactions will certainly continue in the next quarter. Currently we see an increased

activity on the market which will surely manifest in the amount of closed transactions in Q3 and Q4. In the second

half of the year privatization of PKP Energetyka should be concluded and LOTOS does not preclude the sale of

subsidiaries.

On the global stage there were significantly fewer mergers and acquisitions in the first half of the year but some

spectacular transactions occurred. One of the biggest was in May this year - the acquisition of the second-largest

cable network Time Warner Cable in the USA for USD 78.7 billion by Charter Communications.

Despite the slight weakening in the first quarter of 2015 that we wrote about three months ago (global declines at

the level of approx. 30% of both value and the number of transactions), in total, in the first half of this year, the value

of transactions increased by 8% and their number decreased by 11% compared to Q4 of 2014.

Undoubtedly the success of the entire market was mostly due to the Western Europe. In total, during the first half

of this year, this region had the highest value of transactions since 5 years, which resulted in increase of almost 60%

compared to the first half of 2014. The value of transactions of this region accounted for almost 30% of the total in

the world. The number of transactions also increased, although on a lower level – compared to the first half of 2014,

only by 5%.

Since the beginning of 2015, within the CEE, a trend of decline has been noticeable. As in Q1, both the number

and value of transactions declined. The largest decreases were registered in the value of transactions – up to 60%

in the first half of 2015 compared with the second half of 2014. The number of transactions fell by about 40%. In the

region Russia is doing very well (if it is counted as the CEE), but also Slovakia and Poland are doing well.

We can observe a continuing trend of using Virtual Data Room system during transactional processes. Available

data shows that in Q2 2015, 17 out of 54 transactions were conducted with the use of Virtual Data Room (VDR)

(which is 13% more than in Q1 2015). One of the companies which did disclose their use of VDR was PE Fund

Enterprise Investors, which sold NordGlass Group, a leading European producer of windscreens for the automotive

sector. According to Grzegorz Łajca, CEO of NordGlass “the use of dedicated FORDATA VDR tool increased the

e�ciency of the shares selling process".

Experts' comments



Rafał Tuzimek

CEO

Navigator Capital S.A.

The second quarter of 2015 was another quarter with relatively high number of M&A deals on the Polish market.

That number was similar as in the 1st quarter of this year – 54 vs. 50 transactions between January and March 2015.

Intensive activity in the M&A market was not accompanied by similar upturn on the Warsaw Stock Exchange.

Between April 1st and June 30th 2015 the WIG index decreased by 1.41%. The Polish index performed in line with the

major world indices. The American S&P 500 decreased in the same period by -0.23% and the German DAX by 8.53%.

The stock market returns may be a�ected by the possibility of Greece leaving the Eurozone. An additional factor

of instability seems to be the unresolved conflict in Ukraine. The Polish stock market returns were not improved even

though the economic data appears to be favourable, with e.g. according to the data collected by the Ministry of

Labour and Social Policy - the estimated unemployment rate in May of 10,8%.

The largest transaction in the M&A market was the acquisition of a WSE-listed Alior Bank by PZU, the leading Polish

insurance group.

Other interesting transactions involved the acquisition of a French-based truck trailer manufacturer Fruehauf by

Polish Wielton and the consolidation in the biscuits market, where Dr Gerard acquired one of its competitors,

Artur company. Navigator Capital was a financial advisor in both of the transactions aforementioned.

Experts' comments

