After InBev deal, CVC Capital Partners shows thirst for more local acquisitions

After taking over brewer InBev, later renamed StarBev, investment fund CVC Capital Partners is looking at making more acquisitions in Romania. With no specific sum set aside for the country but with a clear target to spend at least EUR 100 million of equity on each transaction, Ozgur Onder, investment director with CVC for Central and Eastern Europe, is now scanning the market

By Corina Saceanu

What sort of potential investments are you looking for in Romania? What market segments are of interest, and what criteria should a business meet to be interesting to CVC Capital Partners?

CVC invests in leading businesses in all sectors. We look for companies with strong management, a successful track record and high growth prospects. Our goal is to invest at least EUR 100 million of equity per transaction, and with EUR 12 billion of capital available for new investments, we practically do not have an upper limit per transaction.

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For how long had you been looking at the Romanian market before the StarBev deal? What sort of acquisition targets were you searching for in the previous years in Romania (and/or the region) and why didn’t CVC Capital Partners seal any deal before?

We established our dedicated Central and Eastern European team in early 2008, have been actively looking for investment opportunities in the region since then, and in 2009 closed one of the largest buyouts ever in the region. We are pleased with our progress in CEE over the past two years and remain excited about future investment opportunities in Romania and the region.

What is the budget for acquisitions in Romania? Through what funds could you invest in the country?

We raised our latest fund in March 2009 and currently have approximately EUR 12 billion available for new investments in Europe and the US. We do not allocate budgets to each country and can commit as much capital as necessary for the right investment opportunity in Romania.

What changes do you have in mind for StarBev’s local activities? What changes have you already made to the company? What is the expected outcome of these changes?

Our goal is to invest in and turn Starbev into the leading brewer in Central and Eastern Europe. In Romania, StarBev now has a new general manager, and we expect the company to perform strongly going forward.

What is the usual life span of such an investment from CVC Capital Partners? To what extent will the fund target hands-on involvement in the company?

We generally hold our investments for four to six years, though there is no hard rule and each investment or exit opportunity is evaluated separately. While we are not passive investors, our philosophy is to allow the professional managers to run the businesses, with high-level support from CVC if necessary.

To what extent have you been contacted by potential sellers about acquisition targets in Romania since the StarBev deal? What was the outcome?

We remain dedicated to the Romanian market and continue to speak with various companies

and stakeholders about potential investments. We cannot comment on specific current or past opportunities.

Of all the businesses that are presented to you, what is the usual proportion that you are interested in and to which you pay close attention, with the intention of buying in?

Every opportunity is different and it is not possible to speak of a general “success rate”. We look at a large number of opportunities every year to find the right investment for us.

What financial performances do you expect from StarBev’s local operations for this year, compared to last year? What about in the long run?

2009 was a difficult year for the Romanian beer market as a whole. Going forward, we expect StarBev to grow its volumes and market share significantly.

How often do you personally come to Romania and what are your priorities at the moment?

Last year I visited Romania several times per month and continue to visit as frequently as necessary. Now that we have closed our acquisition of StarBev, we are focusing on new investment opportunities in Romania and the region. We are dedicated to making further investments in Romania and believe in the country’s strong growth prospects.