In October the second Baltic M&A and Private Equity Forum took place in Lithuania. About 200 guests attended to hear about the most relevant trends in the mergers and acquisitions (M&A) and private equity market in the Baltics along with real case studies from international and local leading players.

The high level of attendance shows renewed interests in M&A transactions in the Baltic market. This was also confirmed by a recent Baltic M&A Market Survey we carried out together with Baltic media leaders Verslo žinios (Lithuania), Dienas bizness (Latvia) and Äripäev (Estonia), who were also our cooperation partners in organising the Forum. The study showed that a half of the respondents were considering acquiring a company or business line during next year.

In cooperation with other Baltic law firms we also continued analysis of Baltic M&A transactions through the M&A Deal Points Study, the second time now, providing you relevant intelligence on sector developments.

On a final note, we are happy to see that the Baltic M&A and Private Equity Forum is truly becoming an annual meeting point bringing together the whole M&A and private equity community of the region – as was our intention when initiating the idea with the first Forum last year in Riga. Therefore …

… see you next autumn in Tallinn!

Sincerely,
Toomas Prangli
Regional head of the SORAINEN M&A and Private Equity Team

FINDINGS OF THE SECOND BALTIC M&A DEAL POINTS STUDY
HIGHLIGHTS OF THE BALTIC M&A MARKET SURVEY 2011
THE FINANCIAL TIMES & MERGERMARKET SHORTLIST SORAINEN FOR BALTIC M&A AWARD!

SORAINEN, together with other Baltic law firms Borenius, LAWIN, Raidla Lejiņš & Norcous, Tark Grunte Sutkiene, Glimstedt, and Tamme Otsmann Ruus Vabamets, carried out the Baltic M&A Deal Points Study. This is the second time that this unique study in the Baltics has been conducted. The first was in 2009 on the initiative of SORAINEN’s regional head of the M&A and Private Equity Team, Toomas Prangli.

The Baltic M&A Deal Points Study 2011 analyses M&A transactions completed in the Baltic States during January 2009 - June 2011 and covers close to 100 transactions in the region. The results are also compared to the 2009 findings. The study provides a valuable insight into M&A transactional practice in the Baltics and can also be used in assessing further trends in the market.

The Baltic M&A Deal Points Study 2011 reveals that during the crisis targets were smaller, with only 10% of them operating across all Baltic States.

The most active sectors in the 2.5 year period in the Baltic M&A market under review were IT, food, and agriculture. Based on the findings of the 2009 study, IT was also one of the most active sectors, while M&A transactions in the retail and wholesale sector significantly decreased.

Compared to findings in 2009, more acquisitions of Baltic companies have been by local (Estonian, Latvian and Lithuanian) buyers – pan-Baltic expansions are ever more common. 

However, the value of a typical M&A transaction dropped to the EUR 1-5 million bracket during the crisis. In comparison, the 2009 study showed that the median value of recent transactions was then in the EUR 5-25 million bracket.

A selection of statistics is available here.

SORAINEN, in cooperation with Baltic business media leaders, performed the first-ever Baltic M&A Market Survey, where about 150 respondent companies participated in answering questions on M&A activities from their company’s perspective. Data collected were used for comparative analysis to identify business interests and ambitions in the Baltic M&A market in 2011-2012 as well as to forecast trends in the short-term.

Despite the turmoil in the global financial markets, the number of companies in the Baltic States which are considering expansion through acquisition is even 1.5 times larger than the number of those opting for sale of their own business.

Based on the survey, half of the respondents (50%) are considering acquisition of the whole or part of a business. Moreover, even 19% of them have specific plans in that respect.

Meanwhile 10% of companies have specific plans for selling their business as a whole or in part and 26% of companies would consider opting for sale if they received an attractive offer. Mostly small companies with an annual turnover of less than EUR 5 million are considering selling their business.

A full report is available here.

The Financial Times and The Mergermarket Group have yet again shortlisted law firm SORAINEN for the “Baltic Legal Advisor of the Year” award in the European M&A Awards 2011 competition.

This is the fifth time that The Financial Times, a leading global source of business news, and Mergermarket, a leading world-wide M&A intelligence database, are organising the annual European M&A Awards to recognise the accomplishments of dealmakers in both the legal and financial fields. However, it is only the second time that winners are being picked for the Baltic region. It is already three years ago that for the first time SORAINEN won the first and so far the only “Baltic Legal Advisor of the Year” award given by The Financial Times & Mergemarket for advising on the largest number of M&A transactions and for the largest total value in the Baltics in 2008 (see more here).

Toomas Prangli, regional head of the SORAINEN M&A and Private Equity Team, comments: “This year the M&A market has been busier again after recession, more deals are being finalised and clearly developing. The Baltic region is being more carefully considered by the European community. We are delighted to be again chosen as a finalist by the organisers based on our track record in 2011.”

Thanks to its integrated regional teams, know-how base and quality management system, SORAINEN's value-added is appreciated by regional clients, exemplified in recent transactions advising on such acquisitions as Unilever acquiring Ingman Ice Cream subsidiaries in the Baltics and Belarus, Bidvest Group acquiring Nowaco business in the Baltics and LEONHARD WEISS acquiring railway and construction companies in Estonia, Finland and Lithuania. Additionally, local highlights last year included advising, Citycon on its EUR 105 million acquisition of Estonia's second largest shopping centre, LOTOS Petrobaltic on acquisition of Geonafta Group in Lithuania and Baltcom in Latvia on one of the largest private equity transactions in the region in 2011.

The European M&A Awards are designed to recognise excellence in corporate, private equity, banking and legal M&A expertise. The winners are chosen through a unique selection process which employs both empirical data and independent expert opinion to form a reasoned and substantiated selection. Winners will be announced on 8 December 2011 during the European M&A Awards 2011 gala in London. More information available from the European M&A Awards homepage.