CEE private equity on the fast track
Volume up, deal value down
Both individuals and companies are keen to catch up with the rest of Europe. Consequently, the main growth industries tailor to that wealth. Media/telecoms, financial services and consumer industries are the biggest target sectors for CEE private equity. The European Venture Capital Association awarded Innova its deal of the year award in 2007 for the investment in Automotive Components Europe (ACE). The deal was a merger between two auto parts companies, one Polish and one Spanish, acquired by Innova in 2005 and 2006. Innova diversified the product range and improved its quality, while boosting customer service and fostering further consolidation with the European market. All of this was in response to a growing demand for high-quality products in the CEE region. The deal is also an example of mergers between western European and CEE companies.
Another sector to benefit from CEE’s growing wealth is private healthcare. Mid-Europa bought 96% of Medycyna Rodzinna, Poland’s largest network of medical clinics, in November, and promptly merged it with another Polish healthcare company, Lux-Med, acquired in October. This deal was one in which a new chief executive was installed after completion.
Romania is now viewed as one of the region’s most attractive countries, especially at mid-market level. GED, a Spanish company, is well positioned, with €300 million of funds under management through three private equity vehicles. It has acquired Plus GSM this year, a Romanian retail chain specializing in mobile phone services, one of CEE’s main growth sectors.
