On 4-5 October in Vilnius, the Baltic M&A and Private Equity Forum was held for the seventh year in a row by Sorainen in cooperation with the Baltic business dailies Verslo Žinios from Lithuania, Dienas Bizness from Latvia and Äripäev from Estonia. Every year, the forum gathers representatives from private equity and venture capital funds as well as investment bankers, consultants, lawyers, business executives and owners.
Attendees found the Baltics to be a market with great potential. “The Baltic states offer many investment opportunities and we should be doing more here”, said keynote speaker Tomasz Czechowicz, founder of Poland’s leading private equity group MCI Capital. He described MCI’s formula for success as follows: “First, you build national champions, then you build regional champions, and then you build European champions – that’s how we do it.”
According to Tamasz Szalai, investment director at CEE Equity Partners, the Baltics should not be considered a small market. “Indeed, companies here are small and it is not easy for funds to invest. Still, it is an exciting market with great potential.”
Not all indicators were positive, however. Žygimantas Mauricas, Chief Economist at Luminor, reminded the audience that economic sentiment is close to post-crisis highs but the Baltics are no longer European champions. “We have to work harder than before, offer something more”, he noted.
Consolidation is a clear trend in the Baltics. “Saturated markets, limited organic growth prospects, the growing importance of cost-efficiency and globalization pressures are the main reasons why consolidation is becoming the new norm,” said Žygintas Mačėnas, co-founder and Managing Partner of SUMMA Advisers. Following this trend, an increasing number of mergers exceeding 40% of market share are being cleared by local competition authorities.
The forum also celebrated the most significant transactions completed in the Baltics during the past year. The merger of Nordea and DNB Baltic operations, the largest-ever Baltic transaction, was awarded the title of the Baltic M&A Deal of the Year 2017. The investment by PAG Capital and Meridian Capital Management in Food Union was announced as the Baltic Private Equity/Venture Capital Deal of the Year, while European Lingerie Group’s acquisition of Germany’s Felina won the title of Baltic Outbound Deal.