Baltic M&A industry stumbled in 2012

11.01.2013, 16:37

The international M&A market declined last year, the decrease in deal activity hitting the Baltics even more significantly compared to the growth year of 2011. Estonia was the driver in 2012 with the majority of the largest Baltic M&A deals taking place there, and is also expected to remain the more active market together with Lithuania this year.

Across the Baltics the number of announced deals decreased by 16% but in Estonia deal volume increased, even surpassing deal numbers in Lithuania, which is a significantly larger economic market. “The proportion of M&A deals connected to Estonia from all Baltic transactions was larger than usual for different reasons. One important deal driver was the aim of previous owners to exit from the market or sector (e.g. sale of Veolia/Dalkia companies, R-Kiosks and Televõrgu), and also to involve new strategic partners (e.g. sale of Vesta and Vopak E.O.S. terminals),” comments Toomas Prangli, head of the SORAINEN regional M&A and Private Equity Team. 

In 2012, by far the largest M&A transaction involving a Baltic company was the acquisition of 37.5% of Global Ports Investments by APM Terminals Management. In the Baltics the target operates through Vopak E.O.S, the largest independent oil products terminal operator in the Baltic States. From the top 10 M&A deals in the Baltics, 6 were also at least partially connected to Estonian targets. SORAINEN acted as legal adviser on 6 of the top 10 M&A deals in the Baltics.

The international M&A market was in decline in 2012 according to information from global databases Mergermarket and Bloomberg. However, the decrease in deal activity in the Baltics was steeper compared to the average 10% decline in Europe and 4% globally. However, a recent M&A survey among Baltic companies suggests that expectations from shareholders and equity investors are increasingly matching in Estonia and Lithuania, so that more acquisitions there could be anticipated in 2013.

“We expect that M&A deal activity in the Baltics will at least remain at the same level in 2013. It will not be comparable to the boom years of 2007-2008 but would be a good result taking into account current economic prospects in Europe,” adds Prangli. “We already see many companies actively preparing for sale, but as usual success depends on interest among buyers and whether a match can be found between the price expectations of both buyer and seller sides.”

Top 10 announced acquisition deals in the Baltic States by sale price in 2012

Buyer: APM Terminals Management*
Company acquired (share stake): Global Ports Investments (37.5%)
Sale price (million EUR): 675
Country: Estonia, Russia, Finland

Buyer: Sinomart KTS Development Limited*
Company acquired (share stake): Vesta Terminals B.V. (including Vesta Terminal Tallinn OÜ) (50%)
Sale price (million EUR): 211.4
Country: Estonia, Netherlands, Belgium

Buyer: Reitangruppen AS*
Company acquired (share stake):  Press distribution and kiosk operations of Sanoma Oyj
Sale price (million EUR):  130.7
Country: Lithuania, Estonia, Finland

Buyer: Baltic Cruises*
Company acquired (share stake): Tallink-Silja Group (15.73%)
Sale price (million EUR): 116.6
Country: Estonia

Buyer: TeliaSonera AB
Company acquired (share stake): TEO LT (19.86%)
Sale price (million EUR): 59.3
Country: Lithuania

Buyer: Igor Kim (private investor)
Company acquired (share stake): Latvijas Tirdzniecības banka
Sale price (million EUR): 34.22***
Country: Latvia

Buyer: Tele2 AB*
Company acquired (share stake): Televõrgu AS
Sale price (million EUR): 25.41
Country: Estonia

Buyer: Chevron Corporation*
Company acquired (share stake): LL Investicijos UAB (50%)
Sale price (million EUR): Undisclosed**
Country: Lithuania

Buyer: OÜ Elekter ja Küte
Company acquired (share stake): AS Erakute, AS Tallinna Küte
Sale price (million EUR): Undisclosed**
Country: Estonia

Buyer: DMT Plus SIA (management of DEPO DIY SIA)
Company acquired (share stake): DEPO DIY SIA (72%)
Sale price (million EUR): Undisclosed**
Country: Latvia

* Deals where SORAINEN advised one of the parties.
** The ranking of the deal in the table does not reflect the value of the transaction.
*** According to unofficial publicly available information.
Prepared by SORAINEN according to Mergermarket data and publicly available information.