Dan Weiler, executive director of the corporate finance & investment banking division at BCR, told Business Review about the make-up of the local mergers and acquisitions market, and outlined the division’s future strategy.
How do you see the current M&A market in Romania?
The Romanian mergers and acquisitions market is in an adjustment period, towards a balance between stand-alone valuations and sellers’ expectations, which should make deals possible. Moderate earn-outs and escrows will probably be used more in the future, helping to bridge a valuation gap.
Are there still acquisition targets in Romania?
There are many interesting companies in Romania, which can be seen as potential acquisition targets. I’m especially talking about companies in the EUR 20-50 million revenue range.
What are the reasons behind a decision to sell in a crisis situation?
The main reason for a “sell” decision from a certain company nowadays is a lack of financing for the current activity of that company and an inability to restructure its current debts. Unfortunately, many Romanian companies have financed, in the past, their long-term growth with short-term debt. Another reason to sell a certain company is the collapse of the real estate market.
What are potential buyers in Romania looking for?
In the mid- and long-term Romania remains an interesting market. Strategic acquirers are looking for a good fit, lower labor costs and long-term growth. Private equity firms are looking for a five-year story, with a happy ending at exit. Both are desperately looking for good, talented local management. As a matter of fact, the lack thereof can be a deal breaker.
What is the BCR’s strategy for its corporate finance and investment banking division?
BCR now has a very strong corporate finance & investment banking department following several years of change. We would like to become trusted advisors to BCR’s clients and non-clients regarding their mergers and acquisitions needs. We are striving to establish a close partnership with decision-makers, long before such an event takes place.