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OVERVIEW OF THE BALTIC M&A MARKET: 2013 TENDENCIES AND 2014 TRENDS In 2014, the bulk of larger acquisitions in the Baltics are expected to be performed by strategic investors (as in the last few consecutive years). Activity by strategic investors is also stimulated by the fact that following recovery of Baltic economies local companies have accumulated additional funds and financing conditions have improved. All this should encourage companies to invest in development, acquisitions and technologies. With regional private equity funds becoming more active, the number of smaller transactions should grow in 2014 as well. On the other hand, companies attracting private equity funds and successfully using them for development often turn into attractive targets for strategic investors. This facilitates larger transactions and the emergence of Baltic companies in the international arena. The positive performance of the M&A market was largely due to a positive response by market participants to economic growth in the Baltic States, belief in a positive economic outlook and the future of the companies acquired, as well as an improving mood in the Eurozone. In 2014, the mood in the Baltic region is likely to remain optimistic and encourage development, which in turn should contribute to more active and bolder steps in planning and implementing mergers and acquisitions. According to the results of a survey of over 100 companies carried out by SORAINEN in all three Baltic States in September 2013 in cooperation with Verslo žinios, Dienas bizness and Äripäev, nearly two-thirds of respondents would seriously consider expanding their business through acquisition of other companies.
The number of larger transactions (with an indicative value exceeding USD 5 million) in Lithuania grew by a third in 2013 compared to 2012 (from 15 transactions in 2012 to 20 transactions in 2013). In this regard, Lithuania nearly caught up with Estonia (21 transactions last year) which was a clear leader in the Baltics in terms of the number of transactions in 2012 (26 transactions or 54% of all transactions in the Baltics). Latvia saw an even more marked increase in the number of transactions, which surged 60% year-on-year. The rise in the number of transactions in Latvia was stimulated by euro adoption and an improvement in the general economic situation in Latvia.
SORAINEN FIRST AMONG BALTIC LAW FIRMS IN BLOOMBERG RANKINGS FOR EASTERN EUROPE Bloomberg has released its Global Legal Advisory Mergers & Acquisitions Rankings 2013 which ranks SORAINEN in 8th place among M&A legal advisers in Eastern Europe and in first place among law firms from Baltic and Belarus region. During 2013, SORAINEN advised on 17 M&A transactions (qualifying for Bloomberg’s criteria) in the Eastern European market earning its high ranking after major international law firms such as CMS, Allen & Overy, and White & Case. Among the transactions advised by SORAINEN in the period under review were:
According to the Bloomberg report, on a global level M&A volume in the fourth quarter of 2013 fell 27.8%, but still the overall volume for the year increased 4%. The financial sector was the most active in terms of M&A in 2013, while the communications industry exhibited the largest growth by deal volume year-on-year, up nearly 42% from 2012. “Motivation to expand business in neighbouring markets has returned. More companies looking for potential targets in the Baltics indicates positive expectations for development in the region. In general, the last year brought more activity in M&A transactions and currently we already see many deals in the pipeline for the upcoming months,” comments Toomas Prangli, regional co-head of the SORAINEN Corporate and M&A Team. Bloomberg is an American multinational financial news corporation, highly regarded in the global M&A industry. See also full report on the Bloomberg rankings (the league table for Eastern Europe on page 35).
RECENT TRANSACTIONS Palink sells Iki store chain For other recent transactions please click here.
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