The following report details mergers and acquisitions activity in Russia/CEE in May 2013 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. Value steady despite plunge in volume The value of mergers and acquisitions (M&A) activity targeting companies based in Central and Eastern Europe (CEE) and Russia largely held month-on-month, while volume dropped sharply across both regions during May 2013. In CEE there were 236 transactions worth a combined EUR 13,245 during the month compared to 772 worth EUR 13,266 million in April, a fractional decrease in monetary terms, but a two-thirds drop in volume month-on-month to mark the lowest point of the last 12 months under review. Similarly in Russia, volume fell three-quarters from 223 in April to 63 and again was the low-point of the year. Meanwhile, value was up by 23 per cent month-on-month to EUR 12,844 million in May, and was the second increase in a row (March 2013: EUR 7,245 million; April 2013: EUR 10,452 million). CEE deals by volume and value Announced date No of deals Total deal value May-13 236 13,245 Apr-13 772 13,266 Mar-13 666 12,035 Feb-13 528 17,900 Jan-13 558 12,595 Dec-12 720 23,674 Nov-12 568 14,074 Oct-12 579 4,044 Sep-12 541 5,083 Aug-12 541 6,096 Jul-12 586 4,347 Jun-12 611 7,656 May-12 511 8,856 Page 1
Deals by volume and value 25,000 900 Deal value 20,000 15,000 10,000 5,000 800 700 600 500 400 300 200 100 0 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 0 Aggregate deal value Number of deals Page 2
Russian deals by volume and value Announced date No of deals Total deal value May-13 63 12,844 Apr-13 223 10,452 Mar-13 206 7,245 Feb-13 204 14,236 Jan-13 169 8,290 Dec-12 336 19,170 Nov-12 212 13,173 Oct-12 193 1,957 Sep-12 172 3,833 Aug-12 184 4,797 Jul-12 203 2,551 Jun-12 248 6,695 May-12 187 5,898 Page 3
One mega-deal dominates A single deal accounted for almost half of the regional value for May, which was a public offer by Russia-based electricity company Rossiiskie Seti worth a whopping EUR 11,076 million, making it the number one deal by value during the month. Some way behind this was the EUR 1,233 million acquisition of Russian solid fuels wholesaler Sibuglemet by entities affiliated with the businessman AM Palankoev. These were the only two deals worth more than EUR 1,000 million during May, and more than half of the top 20 transactions involved Russian targets. Russia leads by volume and value Russia was the number one country by deal value in May with EUR 12,844 million of deal-making recorded, one of its best results of the last 12 months and due in large part to the Rossiiskie Seti cash call. Utilities ranks as highest value sector Unsurprisingly, given the Rossiiskie Seti transaction, deal-making in the gas, water and electricity sector was worth the most in May, with EUR 11,233 million recorded, the best result for the industry in the last 12 months. Again reflecting the top deals by value, wholesale and retail was ranked second with EUR 1,307 million, also the sector s highest result in the last year. Value in the primary sector, which includes agriculture and mining and is often the target of deal-making in the region, was disappointing in May with just EUR 219 million recorded, compared with EUR 3,514 million last month. Companies operating in the banking industry featured prominently in the month s deals and placed it second by volume with 39 transactions, down on 115 last month. Wholesale and retail followed with 27 transactions, against 64 in April, and construction was next with 23, almost halving month-onmonth. Romania was ranked second with EUR 139 million, almost half the EUR 244 million recorded last month, and Poland third with EUR 111 million, a significant drop on EUR 924 million in April. After briefly being overtaken by Ukraine in the volume stakes last month, Russia resumed its number one spot in May with 63 transactions, but this compares poorly with the 223 recorded in April. Ukraine came second with 45, again a significant decrease from last month s 222, and Poland ranked third with 28 compared with 110 in April. In fact, with one or two exceptions, volume was down across all countries, in line with the regional picture. Page 4
Top 20 deals by value Deal value Deal type Target Target country Acquiror Acquiror country Deal status 1. 11,076 Acquisition 73% Rossiiskie Seti OAO RU Announced 2. 1,233 Acquisition 100% Sibuglemet OAO RU Mr SA Kerimov; Mr AM Palankoev RU Completed 3. 138 Minority stake 43% Otkrytoe Aktsionernoe Obshchestvo Energetiki i Elektrifikatsii Lenenergo RU Shareholders; Komitet Po Upravleniyu Gorodskim Imushchestvom Sankt-Peterburga; Rossiiskie Seti OAO RU Announced 4. 120 Minority stake increased to 3% MegaFon OAO RU Mr Ivan Tavrin's company Completed 5. 77 Acquisition StandartNafta OOO; Uralnefteservis ZAO RU Neftegazovaya Kompaniya Russneft OAO RU Completed 6. 72 Acquisition 89% Fabryka Lozysk Tocznych - Krasnik SA PL ZXY Luxembourg Investment Sarl LU Announced 7. 65 Minority stake 9% Sakhatransneftegaz OAO RU Respublikanskaya Investitsionnaya Kompaniya OAO RU Announced 8. 60 Minority stake 9% Mashinostroitelnyi Zavod OAO RU Announced 9. 57 Minority stake 1% OMV Petrom SA RO Societatea de Investitii Financiare Oltenia SA; Undisclosed acquirors RO Completed 10. 46 Acquisition 100% Mobilochka TOV UA Allo TOV UA Completed 11. 29 IBO Starman AS EE East Capital Explorer AB; Mr Peeter Kern; Mr Indrek Kuivallik SE; EE; EE 12. 25 Acquisition Chortkivskyy Tsukrovyy Zavod TOV; Chortkivskyy Tsukor TOV Pending UA Pfeifer & Langen Inwestycje Sp zoo PL Announced 13. 21 Acquisition 100% Snoro Lizingas UAB LT LHV Group AS; RAZFin EE; LT Pending 14. 21 Minority stake increased to 5% BRD-Groupe Société Générale SA RO Aberdeen Asset Managers Ltd GB Completed 15. 15 Minority stake 41% Krasnaya Polyana OAO RU Mr Mikhail Gutseriev RU Completed 16. 14 Minority stake 4% Integer.pl SA PL Announced 17. 12 Minority stake 25% Aktsionernyi Chelyabinskii Investitsionnyi Bank Chelyabinvestbank OAO RU Individuals; Ms SM Burtseva; Mr TA Vasik; Ms VV Vatsurina; Ms AY Lyukova; Ms DS Piskunova; Ms EE Rachilova RU Announced 18. 12 Acquisition 100% Plemzavod Kolos ZAO RU Firma Agrokompleks ZAO RU Completed 19. 11 Minority stake 34% Natsionalnyi Bank Razvitiya Biznesa OAO RU Agroservis OOO; Selkhozsbyt OOO; Mr PL Kachalov RU Completed 20. 9 Acquisition 93% Uzinele Sodice Govora - Ciech Chemical Group SA RO Janikowskie Zaklady Sodowe Janikosoda SA PL Completed Page 5
Top 20 private equity deals by value Deal value Deal type Target Target country Equity provider Deal status 1. 0 Minority stake Aivengo OOO RU Fond Razvitiya Venchurnogo Investvovaniya Goroda Moskvy Completed Page 6
PE value plummets Private equity deals by volume and value Private equity and venture capital investment across the CEE and Russia during May was very disappointing, as both value and volume fell sharply. Announced date No of deals Total deal value A total of EUR 29 million was invested across just two deals in the former, the third consecutive monthly decline (March 2013: 16 worth EUR 4,525 million; April 2013: 15 worth EUR 1,240 million. In the latter the picture was even worse, as just one investment worth less than EUR 1 million was recorded, again marking the third fall in a row (March 2013: nine transactions worth EUR 2,918 million; April 2013: seven transactions worth EUR 1,161 million). This single deal involved Russian mobile advertising firm ivengo raising USD 250,000 seed funding from Moscow Seed Fund. May-13 2 29 Apr-13 15 1,240 Mar-13 16 4,525 Feb-13 10 487 Jan-13 9 79 Dec-12 14 157 Nov-12 13 20 Oct-12 23 205 Sep-12 18 137 Aug-12 8 86 Jul-12 27 488 Jun-12 24 262 May-12 15 187 Page 7
Russian private equity deals by volume and value Announced date No of deals Total deal value May-13 1 0 Apr-13 7 1,161 Mar-13 9 2,918 Feb-13 6 478 Jan-13 2 50 Dec-12 8 153 Nov-12 2 0 Oct-12 10 116 Sep-12 10 134 Aug-12 1 0 Jul-12 8 307 Jun-12 12 123 May-12 5 146 Page 8
Private equity deals by volume and value in CEE Deal value 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 30 25 20 15 10 5 0 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 0 Total deal value Number of deals Page 9
Deal types by volume in May Deal types by volume Deal type May-12 Apr-13 May-13 Minority stake Acquisition Demerger IBO Minority stake 257 436 128 Acquisition 246 333 106 Demerger 0 2 1 IBO 4 1 1 Deal types by value in May Deal types by value Deal type May-12 Apr-13 May-13 Acquisition Minority stake IBO Acquisition 4,496 6,107 12,617 Minority stake 4,321 7,159 599 IBO 39 0 29 Page 10
Target sectors by volume Target sectors by value Target sector May-12 Apr-13 May-13 Target sector May-12 Apr-13 May-13 Other services 136 163 44 Banks 64 115 39 Wholesale & retail trade 47 64 27 Construction 23 42 23 Machinery, equipment, furniture, recycling 44 83 18 Primary sector 27 53 16 Food, beverages, tobacco 25 44 13 Chemicals, rubber, plastics 31 36 12 Gas, water, electricity 30 55 10 Hotels & restaurants 9 9 7 Transport 28 33 7 Metals & metal products 17 13 7 Wood, cork, paper 4 6 5 Publishing, printing 2 11 3 Education, health 7 6 2 Textiles, wearing apparel, leather 11 12 1 Insurance companies 3 20 1 Post and telecommunications 2 2 0 Public administration and defence 0 0 0 Gas, water, electricity 3,375 132 11,223 Wholesale & retail trade 150 823 1,307 Other services 592 2,410 268 Primary sector 463 3,514 219 Banks 529 2,967 121 Machinery, equipment, furniture, recycling 518 883 82 Metals & metal products 1,997 374 63 Food, beverages, tobacco 959 82 29 Chemicals, rubber, plastics 93 1,434 13 Transport 88 571 9 Construction 20 284 8 Education, health 0 401 4 Hotels & restaurants 63 53 0 Publishing, printing 0 9 0 Insurance companies 0 13 0 Wood, cork, paper 1 3 0 Textiles, wearing apparel, leather 1 4 0 Post and telecommunications 0 0 0 Public administration and defence 0 0 0 Page 11
Top countries by volume Top countries by value Target country May-12 Apr-13 May-13 Target country May-12 Apr-13 May-13 Russia 187 223 63 Ukraine 63 222 45 Poland 97 110 28 Romania 21 40 24 Bulgaria 25 39 21 Belarus 26 38 11 Estonia 26 22 8 Serbia 8 14 8 Latvia 12 21 6 Slovakia 2 6 5 Moldova 0 2 3 Czech Republic 11 8 3 Bosnia And Herzegovina 5 6 3 Hungary 7 8 2 Lithuania 10 11 2 Macedonia 2 2 2 Slovenia 3 4 1 Croatia 4 0 1 Russia 5,898 10,452 12,844 Romania 141 244 139 Poland 295 924 111 Ukraine 36 680 75 Estonia 154 5 29 Lithuania 86 32 21 Bulgaria 54 817 8 Czech Republic 2,038 3 8 Moldova 0 6 6 Serbia 1 0 2 Belarus 5 9 1 Page 12
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 01/05/2013-23/05/2013 inclusive Page 13