The Romanian economy has started feeling the effects of the global financial turmoil and as such many Romanian companies, in the absence of alternative financing sources, start entertaining thoughts about inviting outside investors participating in their share capital.
“Even though expectations of the sellers are not yet fully aligned to those of potential investors, we believe that a new wave of consolidation will take place in Romania, in a number of sectors, resulting in a more mature, realistic and competitive market place,” predicted Antonis Ioannides, Transaction Services Partner in Deloitte Romania.
Potential investors, he said, will be far more demanding in the months and years to come, paying increasing attention to, for example, quality of earnings, working capital management and internal controls but also quality of management and corporate governance. With investors becoming more and more sophisticated in their acquisition approach, sellers will also need to learn how to prepare and present themselves in order to maximize shareholder value.
“We advice our clients to re-evaluate assets, because values of a few months ago, might not necessarily be reflecting current market values,” Ioannides stressed.
According to Ioannides, from now on cash flow, working capital management, reporting and forecasting processes will be the focus of attention.
“Business strategies will need to focus on operational excellence. All the above will make the selling of a business a far more complex and demanding process, whereby, sound and experienced advisors will be essential”, he continued.
Currently, the private equity funds are very reluctant to equity only deals, except when the deals have a profitable in terms of price. The activity of private equity funds has been extremely narrowed in the past few years, for several reasons, the most i
