Zephyr Monthly M&A Report

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2 The following report details mergers and acquisitions activity in Russia/CEE in May 2015 using data from the Zephyr database. It focuses on deal activity by target company. Click here to access the raw data in an Excel spreadsheet. M&A value holds month-on-month while volume halves There was slight growth in the value of mergers and acquisitions (M&A) targeting companies based in Central and Eastern Europe (CEE) in May, in spite of a significant decrease in transaction volume. Deals worth a collective EUR 4,250 million were announced over the four weeks, compared to EUR 4,136 million in April, representing a 3 per cent increase month-on-month. However, the result was down almost two-thirds on the EUR 11,474 million recorded at the same time last year. Volume halved between April and May from 762 to 380 transactions, the second consecutive decrease and the lowest figure recorded in the 12 months under review. When taken in isolation, a similar trend emerged in Russia, with value advancing for the second month in a row to EUR 2,441 million (March: EUR 1,431 million; April: EUR 1,705 million) against a 60 per cent drop in volume from 156 transactions in April to 62, again marking a 12-month low. CEE deals by volume and value Announced date No of deals May ,250 Apr ,136 Mar ,958 Total deal value Feb ,620 Jan ,935 Dec-14 1,115 27,121 Nov ,216 Oct ,982 Sep-14 1,027 27,855 Aug ,329 Jul ,970 Jun-14 1,036 10,481 May ,474 Page 1

3 Deals by volume and value 30,000 1,200 Deal value 25,000 20,000 15,000 10,000 1, , May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 0 Aggregate deal value Number of deals Page 2

4 Russian deals by volume and value Announced date No of deals Total deal value May ,441 Apr ,705 Mar ,431 Feb ,351 Jan Dec ,775 Nov ,296 Oct ,205 Sep ,234 Aug ,496 Jul ,846 Jun ,627 May ,603 Page 3

5 Russian rail company targeted in May s top deal by value Russian targets dominated the month s top 20 deals by value, featuring in 11 transactions. The top deal was a capital increase in which Russian rail transportation company Rossiiskie Zheleznye Dorogi issued EUR 1,143 million-worth of shares to its sole stockholder, the Russian government. This transaction accounted for almost half of the month s total deal value for Russia (EUR 2,441 million) and more than a quarter for the CEE region as a whole (EUR 4,250 million). Slovak Telekom was targeted in the second-largest transaction in May. Deutsche Telekom offered to acquire the remaining 49 per cent it does not already hold in the telecommunications company from the Slovak government for EUR 900 million. There was a significant degree of investment from outside the region, with acquirors based in the US, Singapore, the UK, Taiwan and Thailand featuring in the top 20 deals in May. M&A value in transport sector leaps The Rossiiskie Zheleznye Dorogi capital increase transaction gave a major boost to deal value in the region s transport sector, with a more than ten-fold increase from EUR 115 million in April to EUR 1,229 million, the highest result since November M&A value also rose in chemicals, rubber and plastics and gas, water and electricity, while substantial decreases were recorded for the construction and food, beverages and tobacco industries. Given the drop in overall transaction volume for the region it is perhaps unsurprising that volume was down across all industries, with the exception of wood, cork and paper and post and telecommunications, for which increases were recorded, while public administration and defence remained unchanged month-on-month at zero. Page 4

6 Top 20 deals by value Deal value Deal type Target Target country Acquiror Acquiror country Deal status 1. 1,143 Acquisition increased from to 100% Rossiiskie Zheleznye Dorogi OAO RU Pravitelstvo Rossii RU Announced Acquisition increased from 51% to 100% Slovak Telekom AS SK Deutsche Telekom AG DE Announced Minority stake 11% Inter RAO EES OAO RU Announced Acquisition increased from 61% to 88% Farmstandart OAO RU Augment Investments Ltd CY Announced Acquisition increased to 100% VEB-Lizing OAO RU Gosudarstvennaya Korporatsiya Bank Razvitiya i RU Announced Vneshneekonomicheskoi Deyatelnosti (Vneshekonombank) Acquisition increased from 64% to 100% Mostotrest PAO RU TFK-Finans OAO RU Announced Acquisition 100% Siaieichrus OOO RU Qiwi plc CY Pending Minority stake EasyPack Sp zoo PL Templeton Asset Management Ltd; Integer.pl SA; Towarzystwo SG; PL; PL Announced Funduszy Inwestycyjnych PZU SA Acquisition 100% Latgran SIA LV Graanul Invest AS EE Announced Acquisition increased to 100% Dzhei end Ti Bank AO RU J&T Finance Group SE CZ Completed Minority stake 29% Bank Sankt-Peterburg PAO RU Upravlyayushchaya Kompaniya Vernye Druzya OOO RU Completed Acquisition increased from 22% to 100% North Star Shipping SRL RO Archer Daniels Midland Company US Announced Minority stake 49% Colian Holding SA PL Allumainvest Sp zoo PL Completed Acquisition Walki Group Oy's Pietarsaari plant in Finland; FI; PL Mondi plc GB Announced Walki Group Oy's Wroclaw plant in Poland Acquisition increased from 54% to 61% Farmstandart OAO RU Augment Investments Ltd CY Announced Minority stake 15% Polenergia SA PL Completed Minority stake 0% Bank Zachodni WBK SA PL Institutional Investors Completed Acquisition 100% Wistron InfoComm (Czech) SRO CZ Wistron Corporation TW Completed Minority stake increased from 1% to 33% Albion-2002 OOO RU Diksi Yug ZAO RU Completed Capital increase acquired 66% to hold 100% Charoen Pokphand Foods (Overseas) LLC RU Charoen Pokphand Foods PCL TH Completed Page 5

7 Top 20 private equity deals by value Deal value Deal type Target Target country Equity provider Deal status Minority stake EasyPack Sp zoo PL Templeton Asset Management Ltd; Integer.pl SA; Towarzystwo Funduszy Inwestycyjnych PZU SA Announced IBO 76% 3S SA PL Enterprise Investors Sp zoo Announced 3. 9 Minority stake ZnanyLekarz Sp zoo PL European Bank for Reconstruction and Development; Piton Capital LLP; Point Nine Management Completed GmbH; RTAventures VC Sp zoo Sp k 4. 5 Minority stake 20% Mani Men OOO RU Emery Capital Completed 5. 3 Minority stake Khilbi OOO RU Completed 6. 1 Minority stake Level Trevel OOO RU Completed 7. 0 Minority stake Dzhibuking OOO RU Altair Capital; The Untitled Venture Capital Company;Vestor.In Partners Completed 8. 0 Minority stake ParkApp OOO RU Completed 9. 0 Minority stake 30% Tapki OOO RU Completed 10. n.a. IBO majority stake % Good Food Products Sp zoo PL Hartenberg Capital SRO Completed 11. n.a. Minority stake Opteum OOO RU Upravlyayushchaya Kompaniya RVM Kapital ZAO Announced 12. n.a. Minority stake Krawlly RU QIWI Venture Completed 13. n.a. MBO 100% Paperlinx Sp zoo PL Warsaw Equity Management SA Completed 14. n.a. Minority stake 33% Protoweb Sp zoo PL IQ Partners SA Completed 15. n.a. Minority stake Ecois.me PL Completed 16. n.a. Minority stake DelFast UA Completed Page 6

8 Sharp drop in PE activity While M&A value for the CEE region rose in May, there was a significant decrease in private equity and venture capital (PE and VC) investment over the four weeks. A total of EUR 156 million was invested across 16 transactions in the month under review, compared to 25 deals worth a collective EUR 678 million in April, which in monetary terms represented a 77 per cent decline and of 36 per cent by volume. This was replicated in Russia, where PE and VC activity weakened over the four weeks from 9 deals worth an aggregate EUR 281 million in April to 8 worth a combined EUR 10 million. Modest transaction values accounted for the overall decline in May, with the region s highest PE and VC deal a EUR 115 million funding round by Polish parcel locker rental firm EasyPack. Private equity deals by volume and value Announced date No of deals May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun Total deal value May Page 7

9 Russian private equity deals by volume and value Announced date No of deals Total deal value May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Page 8

10 Private equity deals by volume and value in CEE Deal value May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 0 Total deal value Number of deals Page 9

11 Deal types by volume in May Deal types by volume Acquisition Minority stake Capital increase IBO MBO Demerger Deal type May-14 Apr-15 May-15 Acquisition Minority stake Capital increase IBO MBO Demerger Deal types by value in May Deal types by value Deal type May-14 Apr-15 May-15 Acquisition Minority stake Capital increase IBO Acquisition 6,617 1,951 3,280 Minority stake 2, Capital increase 1,896 1, IBO Page 10

12 Target sectors by volume Target sectors by value Target sector May-14 Apr-15 May-15 Target sector May-14 Apr-15 May-15 Other services Wholesale & retail trade Banks Construction Machinery, equipment, furniture, recycling Insurance companies Food, beverages, tobacco Chemicals, rubber, plastics Transport Publishing, printing Hotels & restaurants Metals & metal products Wood, cork, paper Primary sector Education, health Gas, water, electricity Post and telecommunications Textiles, wearing apparel, leather Public administration and defence Other services 1, ,496 Transport ,229 Banks 1,000 1, Chemicals, rubber, plastics Gas, water, electricity Construction Food, beverages, tobacco Wood, cork, paper Machinery, equipment, furniture, recycling 1, Insurance companies Wholesale & retail trade Metals & metal products Publishing, printing Post and telecommunications Hotels & restaurants Education, health Textiles, wearing apparel, leather Primary sector 6, Public administration and defence Page 11

13 Top countries by volume Top countries by value Target country May-14 Apr-15 May-15 Target country May-14 Apr-15 May-15 Poland Romania Russia Bulgaria Ukraine Latvia Estonia Belarus Bosnia And Herzegovina Slovenia Serbia Moldova Czech Republic Lithuania Croatia Hungary Montenegro Slovakia Albania Macedonia Kosovo Russia 5,603 1,705 2,441 Slovakia Poland Romania Latvia Czech Republic Ukraine 4, Belarus Bosnia And Herzegovina Bulgaria Slovenia Lithuania Estonia Croatia Serbia Moldova Macedonia Montenegro Albania Hungary Kosovo Page 12

14 Notes to editors Activity is based on the activity of the target company Deal status is announced within the time period The sector breakdown uses targets activities as defined to be Major Sectors by Zephyr The Russia/CEE region covers target companies in Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine. The date range is 01/05/ /05/2015 inclusive Page 13