Global Finance expects 3 deals and 100-mln euro acquisition in 2009

Global Finance investment fund, one of the first private equity investors in Romania, is looking to make new acquisitions in Romania, willing to pump nearly 100-150 mln euros in the region.

Currently, the company is in negotiations with 5-6 Romanian companies.

“We are in talks with local 5-6 local entrepreneurs. We are negotiating the structure. There is no offer on the table as long as there are deals in progress”, said Stelian Dragan, the new investment director of private equity fund Global Finance.

In addition, he plans to conclude a 100mln euro deal together with another investor, transaction deemed as large and scarce by M&A experts. “It is possible to see large transactions, but not at last year’s level, as the valuation multiples fell sharply. We will see fewer deals, and the stake will lie in the 20-30 mln euros deals.

As Dragan noted, the allocation on markets stems from opportunities, but the Greeks plan to conclude 2-3 deals in the next year in Romania only. “We seek for a 35-40% IRR (internal rate of return), but generally, we are very much interested in the bottom line of an investment, such as the management team, the investment plan and growth potential”, said Dragan.

Global Finance has under management both Global Romania & Bulgaria and South Eastern Europe private equity funds and real estate Global Emerging Property Fund.

“We provide the adequate flexibility right now, our creed being that many opportunities emerge in the market, starting from SMEs to large companies. We are now having a broader approach”, said Stelian Dragan.

The bet this year will be on private equity funds, infrastructure, FMCG, food industry where it is likely to see a consolidation.

“Our focus so far was on IT and financial services, but now, medical services seems to be very resilient to crisis’ effects, and therefore, a reliable investment target”, Dragan added.

Global Finance private equity fund is one of the Romanian market’s old-timers, currently managing stakes in two Romanian companies, namely Totalsoft and Gecad Technologies. According to Dragan, the Greeks have no intention to increase stake in Gecad or to exit from Total Soft. “We have examined all options for Total Soft and we have not made any final decision yet. The investment is not yet matured and we are scanning the environment for short-term possibilities. Either way, we will remain with a majority position in the company, and currently we are running a revision process,” said Dragan.

The Greek investment fund’s client portfolio included mobile telecommunication network Orange, drug producer Sicomed and supermarket chain La Fourmi. Mega Image acquired last year La Fourmi’s 14-supermarket network for 18.6 mln euros.

Global Finance is still looking for new acquisitionns in local IT market, one of the ‘hotspots’ for investors due to Greek fund’s stake in Total Soft.

Global Finance’s n new director sees acquisition opportunities in retail market where he expects a consolidation process, especially in supermarkets. “We have identified investment opportunities at companies held by Romanian entrepreneurs with special focus in the market”.

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