M&A Barometer
Hungary H1 2015
51
39
69
4238
44 4249 48
55
701,079
1,4211,483
0,287 0,3670,183
0,243
1,027
0,849
0,646
0,803
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
0
10
20
30
40
50
60
70
80
H12010
H22010
H12011
H22011
H12012
H22012
H12013
H22013
H12014
H22014
H12015
The Hungarian M&A market
Number of transactions Estimated market size (USD bn)
EY’s M&A Barometer is a summary
and analysis of publicly disclosed
information accumulated from own
research and reputable databases.
M&A activity and data includes
private to private transactions and
excludes:
Acquisitions of minority stakes
below 15%;
Majority shareholder further
acquisition of minority interest;
Real estate transactions (except
when the target and/or buyer was
a real estate company or real
estate fund);
Capital market transactions
(except for transactions that
resulted in a change of control);
Acquisitions of licenses;
Joint venture agreements;
Greenfield investments;
IPOs;
Privatizations;
Multi country deals (value of these
deals was ignored in each country,
but the number was counted in);
and
Internal reorganizations.
Increasing number of M&A deals in Hungary in H1 2015 – IT and technology remains the favorite sector70 deals were publicly disclosed in Hungary in the first half of 2015, which represents
a 46% increase compared to H1 2014 and a 27% increase from H2 2014. The
estimated M&A market size decreased by 5% versus H1 2014 but it increased by 24%
versus H2 2014. Similarly to the previous years, the IT and Technology sector was the
most active industry in Hungary.
Number of M&A transactions increased to 70 in Hungary
In H1 2015, 70 deals were disclosed and published in Hungary, reflecting a 46%
increase compared to H1 2014. Since H1 2011 (69 deals), this has been the most
successful period, in terms of the number of publically disclosed transactions.
Estimated value of the M&A market - USD 0.80bn
Transaction values were disclosed and published in 40% of the deals (28), lower than
H1 2014 of 56%.
Based on the publicly available information, the estimated size of the Hungarian M&A
market was
USD 0.80bn. This represents a 5% decrease from H1 2014, but a 24% increase from
H2 2014.
The average deal size of deals with a disclosed deal value below USD 100m was USD
4.3m in H1 2015, which represents a 5% decrease from USD 4.5m in H1 2014.
3641
2530
19
43
15
27
1312
29
27
0
10
20
30
40
50
60
70
80
H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015
Strategic Financial
Domestic58%
Inbound38%
Outbound4%
H1 2014
Outbound6%
H1 2015Local deals and strategic investors dominate the
market
In H1 2015, similarly to the previous years, the Hungarian
transaction market was dominated by domestic transactions,
where in 60% of the deals both the target and buyer were
Hungarian entities.
The origin of inbound investments includes UK
(5 deals), USA (4 deals) Austria and Switzerland (3 deals).
Only 4 publicly disclosed outbound transactions were noted in
H1 2015, 3 of them were executed by MOL Nyrt. and the fourth
by OTP Bank.
In contrast to the previous year, strategic investors were in
majority in Hungary in H1 2015. Approximately 61% of the
deals were performed by strategic investors. Moreover, 49% of
the strategic investors’ deals were inbound transactions
including one of the largest deals in H1 2015, the acquisition of
Accor-Pannonia Hotels by the polish hotel chain operator Orbis
SA. The deal value was USD 168.9m – according to public
sources.
89% of the deals performed by financial investors were domestic
deals.
IT and technology remains to be the most
attractive, followed by Energy and mining and
Telecom and media
IT and technology
The IT and technology continued to be the most attractive
sector. In the first half of 2015, 16 deals occurred in this sector
compared to 20 deals in the same period in 2014. The average
deal value was USD 2.1m. The most popular targets were
companies developing cloud computing, data protection and
financial IT software services as well as companies involved in
biotechnology. The IT and Technology sector was dominated by
domestic deals (69%) in terms of volume of transactions.
Energy and mining
There were 8 transactions closed in the Energy and mining
sector H1 2015. 6 out of 8 deals were closed by strategic
investors. Transactions included MOL’s acquisition of ENI
Romania, Ithaca Petroleum Norge AS and the DG Khan oil
exploration block. Furthermore Pannon Drill Kft.’s acquisition by
Forte Venture Capital and Renewable Energy Investments Zrt’s
acquisition by Hemisphere.
Domestic60%
Inbound34%
IT and technology Energy and mining
Telecom and media Manufacturing
Banking and financial services Transportation and logistics
Food and beverages Publishing and printing
Services Pharmaceuticals and health care
Other Construction
Retail and wholesale Agricultural
Number of deals by industry in H1 2015
23%
12%
10%
7%7%
7%
7%
6%
6%
4%
4%3%
3% 1%
Ernst & Young
Assurance Tax Transactions Advisory
© 2015 EYGM Limited.All Rights Reserved.
This publication contains information in summary from and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor.
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Contacts
Margaret [email protected]
Ferenc [email protected]
András Bá[email protected]
Ferenc [email protected]
Telecom and media
In the Telecom and media sector, 7 transactions were closed in H1 2015. The average
deal value was USD 2.3m. Transactions included, amongst others, the acquisition of
OLX.hu by jofogas.hu, the sale of Viasat3, Viasat6 channels and Viasat Play catch-up
service to Sony Pictures Entertainment Inc. and the acquisition of Rádió Juventus by
Tematic Group Kft.
Banking and financial services
In the Banking and financial services sector 5 transaction were closed but only one
deal value was disclosed. Transactions included e.g. the acquisition of Bank
Findomestic Banka by OTP, the sale of MKB Bank insurance arms’ and CE Faktor Zrt.’s
acquisition by MagnetBank Zrt.
Food and beverages
There were 5 transactions closed in the Food and beverages sector in H1 2015. The
average deal value in the sector was the highest, at USD 174.0m. Transactions
included Partner in Pet Food’s acquisition by Pamplona Capital Management with the
highest deal value disclosed in H1 2015.
Manufacturing
5 transactions were closed in the Manufacturing sector in H1 2015. The average deal
value in the sector was USD 1.7m. The transactions included KGF Hungary Kft.’s
acquisition by Garangold, Alurad Heating Innovation Kft.’s acquisition by Prosperitas
Profit and Kalocsai Porcelánfestő Kft.’s acquisition by Agrotechfood Zrt.
Transportation
5 transactions were closed in the Transportation sector in H1 2015. 4 out of 5 were
domestic including TrustAir Aviation Kft.’s acquisition by Garangold for a market
estimate of USD 2.1m.
The State as an active player
An interesting aspect of the Hungarian transaction market remained that, similarly to
the previous years, the Hungarian State both directly and through State owned
companies was an active player. The table contains those transactions where the
Hungarian State acted as buyer or investor. Please note that these transactions have
not been included in the analysis of the M&A market and the above deal numbers.
Transactions with state involvement in H1 2015*
* Transactions are not included in the overall analysis and statistics.
Target company Buyer Value (USDm)
Budapest Hitel- és Fejlesztési Bank Zrt.
Corvinus Nemzetközi Befektetési Zrt.
685.11
Styl Ruhagyár Zrt.Municipality of Szombathely;Hungarian private investor(s)
3.59
Panrusgaz Gázkereskedelmi Zrt. MVM Magyar Villamos Művek Zrt. 3.50
E.ON Energiaszolgáltató Kft.; GDF Suez Energia Magyarország
Zrt.Főgáz Zrt. n/a