Robert Conn, co-founder of Innova Capital private equity firm, says the major players of the private equity industry have not arrived in Romania, yet, with the moment of their entrance being conditioned on the capacity of domestic entrepreneurs to absorb investments of above 100m euros.
"On the Romanian market, there are few funds that invest over 80m euros in a company, so that we can say major private equity players are not here, yet. Romanian companies cannot easily absorb large investment volumes. Hence, major players such as Carlyle, Bridgepoint, Warburg Pincus will only strike occasional deals in Romania," Robert Conn told ZF in an interview.
Major private equity players come up with massive investment budgets, signing deals for sums starting from 100m euros and going beyond 800m euros.
However, there are very few Romanian companies able to lure private equity investors with budgets of several hundred million euros.
Even funds with budgets of below 100m euros are finding it hard to identify investment targets.
"In Romania, there are few 'hot' sectors capable of attracting the attention of private equity investors (...)," Conn also said.
The relatively limited number of companies ready for private equity investments has driven asset prices up.
Having entered the Romanian market nine years ago by acquiring stock in Orange, Poland's Innova Capital currently owns a single Romanian firm in its portfolio, La Fantana, which it bought last year from another private equity fund, Oresa Ventures, in the wake of a 35m-euro deal.
For the following years, Innova plans to become more active on the Romanian market. The budget earmarked for investments ranges between 20 and 80m euros per deal. "We want that one deal out three, the annual target we have for CEE, to be closed in Romania".
Innova Capital's business model mainly consists of companies providing services to other corporate entities, companies that are market leaders or have the potential to gain such a position, and is mainly interested in acquiring the majority interest in them.
Conn chose not to give any details about domestic potential acquisition targets. "We're trying to find companies nobody knows about, in a sector where there's no competition (...)"
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
