2009 closing report - 3 Seas Capital Partners

Transcription

2009 CLOSING REPORT
“Our achievements of today are the
sum of our thoughts of yesterday.”
Louis Pasteur
Institutional
Completed Transactions
IMAP 2009 Istanbul
Articles
Since its foundation, 3 Seas Capital
Partners has shown substantial
efforts in contributing to the newly
developing M&A culture and
market in Turkey. This has evolved
further in 2009, when the effects of
a global crisis persisted. Completion
of 8 transactions reinforced our
leadership in the sector.
02
Turkey found the chance to improve many of its structural
problems as an outcome of its own financial crisis back in
year 2000, primarily in the banking system and the public
finance sector. Despite the contraction suffered by
production related sectors, Turkey managed to survive the
last global crisis without any major damages. Notwithstanding
the various speculations, we believe that the global crisis,
which started at the end of 2007 in the US spread globally
in 2008 and continued throughout the first three quarters
of 2009, has started to fade away. The post-traumatic stress
and misperceptions emerging after every crisis may further
impose a negative effect for another period and may cause
the recovery period to be less rapid than expected. However,
should the current trend continue its course, it appears
that the global economy will start surging again.
Turkey has not suffered as dire damages as some of the
other countries during the crisis period, and almost all
international institutions, especially the World Bank and
IMF, place Turkey in the top ranks of their growth forecasts
for the years 2010-11. All these give us further confidence
to proclaim that Turkey is on the verge of a "take off". Not
only the views of international institutions and leading
economists, but also the positive changes in many
fundamental indicators validate this anticipation.
Considering the current low levels of interest rates and
the announcement by the Central Bank of Turkey that they
will be sustained at these levels for the foreseeable period,
timing to start new investments appears to be perfect.
We have yet again completed 2009 as the leader.
We are hopeful of the new period from another aspect of
our line of business; many transactions which could not
be completed due to the ambiguity of the crisis environment
and were postponed to 2010, will be completed in the
upcoming days, and this alone will be a major sign of
recovery by itself. Besides, the acceleration that will be
observed in the international flow of funds will help this
recovery become permanent.
The IMAP Global Mergers and Acquisitions Symposium
that we hosted in October 2009 at the İstanbul Çırağan
Palace Kempinski Hotel was defined by the media as one
of the most important international meetings in the business
world held in Turkey in the past year, along with the IMFWorld Bank summit, and it was of utmost importance for
our company. As you will find the details of this conference
in the following pages of our Closing Report, the broad
participation of executives and investors from many
outstanding Turkish and international firms was one of
the signs showing that Turkey had started recovering even
sooner than expected. We are exultant and honored to
have hosted such a grand conference.
Even though we are now more optimistic towards the
future, we should not forget this stressful crisis period that
we have endured. I had emphasized a "common mind” in
our last year’s Closing Report and pointed out the
importance of improving new partnerships as one of the
most advisable ways of sharing risk in such onerous times.
In the articles of this year’s Closing Report, we have
addressed the methods of coping with such periods from
another perspective, through the example of "successful
competitors", a concept that is highly important for us. I
recommend you read them.
Since its foundation, 3 Seas Capital Partners has shown
substantial efforts in contributing to the newly developing
M&A culture and market in Turkey. This has evolved
further in 2009 when the effects of a global crisis persisted.
In this respect, it is noteworthy to state that we have
completed 8 transactions in 2009, further reinforcing our
leadership. Hence, I consider that we have helped the
Turkish M&A market and consequently bolstered the
morale of our businessmen, just like we did in organizing
the IMAP conference. It is another source of pride for us
that significant global players have been involved in most
of the transactions that we have completed in 2009 and
those we are about to announce in succession in the
upcoming months.
In closing, I would like to take this opportunity to present
my gratitude to my esteemed partners and my colleagues
who helped us repeat as the leaders among all local and
foreign financial institutions in Turkey in terms of
completed transactions in 2009, just like we did in 2008,
and for their contributions in organizing one of IMAP’s
global conferences in Turkey in 2009 with great success. I
am certain that our 3 Seas Capital Partners team, which is
undoubtedly the most dynamic and qualified team in the
sector will be repeatedly recognized for their achievements
and success.
Şevket Başev
CEO
03
3 Seas Capital Partners is the leading
financial institution
in Turkey in the M&A business, which accounts for the
majority of its operations.
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Institutional Presentation
3 Seas Capital Partners is an İstanbul
based corporate finance and
investment advisory boutique that
provides timely, creative, professional
and effective solutions. These solutions
serve the financial and strategic needs
that arise in business formation,
development and sale transactions.
3 Seas Capital Partners serves its
clients with global standards by
leveraging its extensive contacts in the
domestic and international business
communities, and accumulated
knowhow in corporate finance, and
corporate management and strategy.
Offering M&A advisory, project and
growth finance, financial restructuring
and special finance solutions to meet
its clients' needs, 3 Seas Capital
Partners has collaborated with
Turkey's and the world's leading
institutions at different levels since its
foundation.
M&A Projects
3 Seas Capital Partners is the leading
financial institution in Turkey in the
M&A business, which accounts for the
majority of its operations. Our
company provides strategic and
financial advisory services to the buyer
or the seller, according to the nature
of the transaction. Still being a novel
concept in Turkey, M&A necessitates
a closer client-advisor relationship
compared to other financial services
and it requires a long and disciplined
process.
3 Seas Capital Partners maintains the
confidentiality of its clients throughout
the M&A process, which requires
absolute loyalty and confidentiality,
as well as after the completion of the
process. The principle of establishing
cooperation with the clients is identical
to the cooperation between real
partners. 3 Seas Capital Partners
prudently upholds this principle
which it sees as essential in M&A
transactions.
The M&A process, under normal
circumstances, consists of the stages
of data analysis, preparation of all the
relevant documentation (including the
information memorandum), search
and identification of suitable
candidates, arrangement and
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maintenance of communication with
the candidates, negotiations,
completion of the term sheet, due
diligence processes and finally, the
diligence, and the transfer of shares.
The clients are usually unaccustomed
to these stages and they perceive it as
a complex chain of events. 3 Seas
Capital Partners maintains constant
dialogue with its clients to get them
oriented to the process. This dialogue
ensures a healthy flow of detailed
information to the clients regarding
the provided services, applied
methods of analysis and effective use
of prepared materials, through which
the clients fully understand the M&A
process. The detailed list of completed
deals in the following pages is the
most significant evidence of 3 Seas
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Capital Partners' expertise in M&A
transactions.
Financing Solutions
3 Seas Capital Partners, in constant
cooperation with leading global
investment funds, and domestic and
international banks, offers advisory
services in acquisition finance, project
finance and debt restructuring. In
addition to these services, 3 Seas
Capital Partners also provides flexible
solutions according to its clients'
changing needs and conditions.
Acquisition Finance
In many M&A projects, access to
funding is also needed along with
equity capital. When such a necessity
emerges, 3 Seas Capital Partners
analyzes the funding needs in detail
and determines the most appropriate
financing options and collateral
structures.
During the loan process, 3 Seas
Capital Partners determines the most
suitable option from a list of
alternatives offered by domestic and
international banks with which 3 Seas
Capital Partners has close
relationships. During the process
3 Seas Capital Partners conducts all
the negotiations and supervises all
the related contracts on behalf of and
in collaboration with the client.
Project Finance
Project finance is a new service
provided by 3 Seas Capital Partners.
Project finance is of vital importance
primarily in new business areas, and
With its vast international network,
3 Seas Capital Partners provides services
in global standards.
it is a suitable vehicle in various
sectors for the transformation of
precious ideas into new operations.
Although our involvement in this
field is fairly recent, thanks to our
team of experts, we have managed
to make a significant impact within
a short period of time.
While the maturity horizon in
acquisition finance is usually short
to mid-term, the maturity horizon
for project finance varies from five
to 15 years depending on the nature
of the project. When it is deemed
necessary, project finance can be
obtained with a grace period of one
to five years.
Debt Restructuring
3 Seas Capital Partners provides
advisory services for the
restructuring of loans that are no
longer appropriate for the client's
financial standing and cash flow
structure. Short-term loans,
expensive loans, loans with heavy
collateral structures, loans with
payment structures that do not
correspond to the company's cash
flow structure and loans that expose
the company to a foreign exchange
risk are good candidates for
restructuring. In the debt
restructuring process, 3 Seas Capital
Partners negotiates with creditors,
contracts protocols with existing
creditors and assists the client in
obtaining new loans to pay off
existing debt. In some occasions,
3 Seas Capital Partners facilitates
private equity investments into the
company and these investments
increase the company's capacity to
obtain new or restructured loans.
References
As one of the leading corporate
finance and strategic advisory firms
in Turkey, 3 Seas Capital Partners has
completed more than 35 M&A deals
to date, with total transaction size
exceeding USD 2.5 billion.
Having completed 2007 as the market
leader among Turkey based financial
institutions, 3 Seas Capital Partners
became the sector’s leader among all
financial institutions in the years 2008
and 2009, in terms of completed
transactions. As further detailed in
the Completed Transactions section
on the following pages, there are many
important domestic and international
enterprises among the clients we have
served.
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3 Seas Capital Partners corporate finance team is comprised of an
executive team with extensive
experience, and professionals
with degrees from leading universities of the world.
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Managing Partners
Emre Erginler, specializes in private equity fund investments, M&A, corporate
finance and investment advisory services. Prior to joining 3 Seas Capital
Partners, he held various positions in the industrial, investment banking and
private equity aeas.
Following his graduation from Syracuse University (U.S.A.) as a mechanical
engineer, he completed his MBA at Rice University (U.S.A.).
fievket Baflev, specializes in M&A, financial restructuring, corporate finance,
competition law, contractual negotiations, investment law and investment
advisory services. In 2004, Euromoney magazine selected Mr. Başev as one of
the 15 most successful investment bankers in Europe's emerging markets. He
graduated from Marmara University's Department of Public Administration,
Economy and Finance in French. He completed his graduate studies at Paris
Panthéon-Sorbonne University (France), Department of International Economy
Law. Mr. Başev also has a graduate degree in European Union Studies from
Galatasaray University in Istanbul. Şevket Başev, has been elected as a board
member of IMAP for the EMEA (Europe, Middle East and Africa) region in
2009.
Tar›k fiarl›gil, specializes in M&A, private equity, corporate finance, and
project and tender management advisory services. Prior to joining 3 Seas
Capital Partners, he worked in investment banking and private equity areas.
Following his graduation from Istanbul Technical University's Food Engineering
Department, Mr. Şarlıgil completed his MBA at Sabancı University in Istanbul.
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Our Team of Professionals
Demir Demirba¤
Frank RoccoGrande
‹brahim Ar›nç
Director
Director
Director
Mr. Demirbağ graduated from
Georgetown University (U.S.A.) in
1997 with a B.S. degree in Business
Administration. Before joining 3 Seas
Capital Partners in September 2007,
Mr. Demirbağ worked as an Analyst
at Dundas Ünlü & Co., Senior
Analyst at Garanti Securities, and
Assistant Vice President at Ekspres
Invest in the areas of M&A, initial
public offering (IPO) and
privatization advisory services. At
these companies, he covered various
sectors and participated in numerous
milestone projects, including the
privatization of Türk Telekom
through a block sale for
USD 6.55 billion in 2005 and the
highly successful Bank Asya IPO in
2006.
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Before 3 Seas Capital Partners,
Mr. RoccoGrande worked for two
years as a Partner at AccessTurkey
Capital Group, an Istanbul-based
asset management firm managing
private equity, real estate, and hedge
fund assets. He focused on sourcing,
evaluating, structuring, and closing
middle market private equity and
real estate investments. In addition,
he was responsible for fundraising
and investor relations activities.
Prior to AccessTurkey,
Mr. RoccoGrande spent three years
as a Partner at Valeo Partners, a New
York-based middlemarket private
equity firm, focused on private and
public investments in media,
entertainment, retail, medical
device, and biotechnology
companies. Prior to that, he was a
Director at Newtek Capital, a New
York-based middle-market private
equity firm, focused on control
buyouts of financial services and
business services companies. He has
a M.P.H. from Columbia University
(U.S.A.) and a B.S. in Chemistry
from the George Washington
University (U.S.A.).
Ibrahim Arinc received his Bachelor
of Science (Hons.) degree in Business
Administration with a double major
in and Finance and Economics from
Babson College (U.S.A.) in 1998.
Mr. Arinc commenced his career at
a New York-based investment bank,
Gerard Klauer Mattison & Co.,
where he worked as an advisor to
various firms in the areas of initial
and secondary public offerings,
M&A transactions, placements of
convertible securities and strategic
partnerships. Mr. Arinc completed
his graduate studies at Boston
College (U.S.A.) and earned a M.Sc.
degree in Finance in 2003. Following
his return to Turkey in 2005, Mr.
Arinc worked at the Equity Research
department of EFG Istanbul
Securites as a Senior Analyst, and at
the Non-Performing Loans (NPL)
and Fixed Income Securities
department of Standard Unlu
Securities in the corporate and debt
restructuring areas.
Ali Karamano¤lu
Do¤ukan Ertürk
Berk Tanyeli
Associate
Associate
Associate
Mr. Karamanoğlu graduated from
the Business Administration and
Economics Department of Istanbul
Bilgi University in 2004. In 2005, he
completed his extension program
with a finance focus at the University
of California at Berkeley (U.S.A.).
Prior to joining 3 Seas Capital
Partners, he worked at Deniz Invest
as an IPO and privatization advisor,
and participated in Bank Asya and
Vestel IPOs and Türk Telekom
privatization.
Doğukan Ertürk graduated from the
Department of Business
Administration at Bilkent University
with an honor degree. Mr. Ertürk
completed his graduate studies in
International Commercial Law at
University of Leicester (U.K.) with
a distinction degree and in Banking
and Finance Law at University of
London - Queen Mary College
(U.K.) with a merit degree.
After graduating from Tarsus
American College in 2000,
Mr. Tanyeli completed his
undergraduate studies at the
Mechanical Engineering Faculty
of Yıldız Technical University in 2004
with an honor degree. Mr. Tanyeli
started his career at Honeywell, a
global technology firm, in 2005. After
receiving his MBA degree from
EADA Business School (Spain) in
2007, he joined 3 Seas Capital
Partners as a Senior Analyst
in 2008.
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Bekir Y›ld›r›m
Ça¤lar U¤urlu
Research Analyst
Analyst
Mr. Yıldırım, who has been a part
of the 3 Seas Capital Partners team
since its establishment, previously
served various positions in the
media and communications sectors.
Throughout the 1990s, Mr. Yıldırım
acted as the Izmir representative of
BDP News Agency, a provider of
real-time data services to investment
firms active in the stock exchange
and Ittifak, a popular business daily.
In 1997, Mr. Yıldırım started his role
as an editor for PC Magazine,
Internet World and Intermedia
magazines in Istanbul. Later, he
served as a press coordinator for
Sistem Yayın and project editor for
Yapı Kredi Yayınları, Alfa Yayınevi
and Agora Kitaplığı on publishing
many novels, business books, web
articles, magazines and
encyclopedias. Mr. Yıldırım also
served as a press consultant to the
İstanbul Bar Association between
2001 and 2002.
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Çağlar Uğurlu graduated from the
Department of Electrical and
Electronics Engineering at Bilkent
University in 2007 and he completed
his MBA in the same university in
2009. He also took various
postgraduate courses in 2009 from
the Finance Department of
Copenhagen Business School. Prior
to joining 3 Seas Capital Partners,
Uğurlu completed his internships
at PDF Corporate Finance, Fortis
Portfolio Management and
Rothschild.
Support Personnel
Fatmagül Savaşan
Fırat Sönmez
Arzu Kara
Orhan Eriş
Hilal Demir
2009 Mergers and Acquisitions (M&A) Ranking of
Corporate Finance Institutions Operating in Turkey
Rank
3 Seas Capital
Partners reinforced
its leadership in
the sector by
completing eight
transactions with
a total value of
over USD 300
million in the year
2009, whilst the
effects of the crisis
persisted.
Company
Number of
Transactions
Total Transaction
Size
(million USD)
1
3 Seas Capital Partners
8
312*
2
Pragma Corporate Finance
4
303
3
IS Investment Securities
3
51
4
SG
2
727
5
Raiffeisen Investment
2
566
6
Royal Bank of Scotland Group plc
2
278
7
JP Morgan
2
265
8
HSBC Bank
2
85
9
EFG ‹stanbul Securities
1
424
10
OYAK Yat›r›m Securities
1
219
11
JPMorgan Cazenove
1
140
12
Rothschild
1
140
13
KPMG
1
90
14
Fortis Holding
1
25
15
Stellar Energy Advisors
1
11
16
ATA Invest
1
-
17
Bank of America Merrill Lynch
1
-
18
Deloitte
1
-
19
Ernst & Young
1
-
20
Goldman Sachs
1
-
21
Morgan Stanley
1
-
22
PDF Corporate Finance
1
-
23
Pricewaterhouse Coopers
1
-
24
Standard Unlu Securities
1
-
25
Zolfo Cooper Corporate Finance
1
-
* Undisclosed transactions are included. Mergermarket
league table 2009 completed deals
13
3 Seas Capital Partners completed 8
the year 2009, becoming the
M&A transactions in
leader among all finance institutions
in terms of closed deals.
14
Deals Completed in 2009
TII- Fleetcorp
Sandras Su - Coca Cola
Remaining 25% stake belonging to the founding
shareholders of Fleetcorp Operasyonel Filo Kiralama A.Ş.,
(previously operating as Docar) one of Turkey’s leading
fleet rental firms has been acquired by one of the leading
investment groups of the Middle East - The International
Investor. TII had acquired 75% of Fleetcorp in 2005, and
had subsequently acquired Desas in 2006. As a result of
this transaction, TII owns all of the outstanding shares in
Fleetcorp.
Certain assets, rights, permits and licenses drinking water
operations of Sandras Su Gıda Turizm Taşımacılık İnşaat
A.Ş, a company owned by Turkon Holding, one of Turkey’s
most established conglomerates, have been acquired by
Coca Cola İçecek A.Ş.
3 Seas Capital Partners managed this minority share sale
process in March 2009 on behalf of Fleetcorp founding
partners and provided financial and strategic advisory
throughout the project.
Turkon Holding
Turkon Holding is a prominent Turkish maritime transport
company and a part of the Kaşif Kalkavan Group, one of
the most established players in Turkey's maritime business.
Led by Mr. Nevzat Kalkavan, Turkon Holding has one of
the country's most modern fleets and conducts container
transportation on the U.S., Europe, and Eastern
Mediterranean routes. Turkon has offices and agencies in
all ports of Turkey as well as several important maritime
centers of the world.
Fleetcorp
Following the acquisition of 75 % of Docar Operasyonel
Taşıt Kiralama A.Ş. shares in February 2005 by the
international investment group "The International Investor"
(TII), Docar was renamed Fleetcorp and its capital structure
was strengthened. Upon the acquisition of 100% of Desas
Ticari Araçlar Kiralama Servis ve Tic. A.Ş. in June 2006,
which had one of the largest commercial vehicle fleets in
Turkey, Fleetcorp became one of the leading companies in
the sector.
TII
Founded in 1992, the Kuwait-based investment group The
International Investor (TII), was listed on the Kuwait and
Bahrain stock exchanges in 1996. Other than Fleetcorp, the
Group includes many financial firms actively operating in
various Middle Eastern countries.
3 Seas Capital Partners has provided financial and strategic
advisory to Turkon Holding shareholders throughout the
transaction process.
Coca-Cola İçecek A.Ş.
One of the leading bottling companies within the CocaCola system, and ranking 6th in this system per sales
volume, Coca-Cola İçecek A.Ş. operates in a region
comprising Turkey, Pakistan, Central Asia and the Middle
East. CCİ undertakes the production, sales and distribution
of The Coca-Cola Company branded carbonated and noncarbonated beverages in Turkey, Pakistan, Kazakhstan,
Azerbaijan, Kirghizstan, Turkmenistan, Jordan, Iraq and
Syria. CCİ has a total of approximately 11,000 employees
in 20 factories throughout 10 different countries.
15
Port Göcek Marina
Do¤ufl Holding
Anadolu Turizm Yatırımları A.Ş., a subsidiary of Turkon
Holding, one of Turkey’s most established conglomerates
and the operator of Port Göcek Marina, was acquired by
Doğuş Holding. With the acquisition of Port Göcek Marina,
which has been operational since 1999, Doğuş Holding A.Ş.
increased its number of marinas in Turkey to 3 and its yacht
capacity to 1,525.
3 Seas Capital Partners acted as the exclusive financial and
strategic advisor to Turkon Holding shareholders in the
transaction.
Turkon Holding
Doğuş Holding
Founded in 1951, Doğuş Group operates in seven sectors;
finance, automotive, construction, media, tourism,
real-estate and energy. Housing 103 companies and near
20,000 employees, Doğuş Holding had USD 25 billion
consolidated assets by the end of 2008 and USD 4.6 billion
in consolidated revenues. Comprising many major
corporations like Garanti Bank, NTV, Doğuş Automotive
and TÜVTÜRK, Doğuş Holding also has joint-ventures with
many international groups such as General Electric,
Volkswagen AG and Alstom.
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Marmaris Select Maris
Do¤ufl Holding
Kartal Otel Marmaris Turizm İşletmeciliği A.Ş., a subsidiary
of Turkon Holding, one of Turkey’s most established
conglomerates and the owner of Marmaris Select Maris
Hotel, was acquired by Doğuş Holding. In light of its
growth targets in the tourism sector, by acquiring this
five star hotel with 274 rooms and 553 beds, Doğuş Holding
has increased its number of hotels to 8, and its bed capacity
to 5,150.
3 Seas Capital Partners acted as the exclusive financial and
strategic advisor to Turkon Holding shareholders in the
transaction.
Turkon Holding
Doğuş Holding
Founded in 1951, Doğuş Group operates in seven sectors;
finance, automotive, construction, media, tourism, realestate and energy. Housing 103 companies and near 20,000
employees, Doğuş Holding had USD 25 billion consolidated
assets by the end of 2008 and USD 4.6 billion in consolidated
revenues. Comprising many major corporations like Garanti
Bank, NTV, Doğuş Automotive and TÜVTÜRK, Doğuş
Holding also has joint-ventures with many international
groups such as General Electric, Volkswagen AG and
Alstom.
Harvey Nichols Istanbul
Demsa
Licensing and franchise rights for Turkey and the İstanbul
store of Harvey Nichols - one of the world’s leading luxury
multi-brand chains - established by Unitim Holding have
been acquired by Demsa İç ve Dış Ticaret A.Ş.
3 Seas Capital Partners has managed this process on behalf
of Unitim Holding shareholders and provided financial and
strategic advisory throughout the transaction which has
been completed in March 2009.
Unitim Holding
Established in 1997, Unitim Holding is the representative
and master franchisee of the world’s leading fashion brands
in Ukraine, Moldova, Azerbaijan, Kazakhstan, Romania,
Georgia and Russia as well as Turkey and operates many
stores in these countries. Operational in retail and textile
sectors, Unitim Holding also is the master franchisee of
global brands such as Polo Ralph Lauren and Accessorize
in Turkey.
Demsa Group
Established in 2000 and currently operating 80 stores with
700 employees throughout Turkey, in addition to Harvey
Nichols, Demsa Group is the Turkey master franchisee of
world-famous brands like, Gianfranco Ferré, Just Cavalli,
Ice Iceberg, M Missoni, Marc Cain, D&G, Gerard Darel,
Guess, Fornarina, Laura Ashley, Mothercare, ELC, Etam,
and Charles & Keith.
Duru Toplu Tüketim
Güney 2M Da¤›t›m
80% of the shares of Duru G2M, a joint-venture between
Güney 2M, the biggest distributor and wholesaler of food
products to hotels, restaurants and cafeterias in Turkey, and
the Antalya-based distributor and wholesaler Duru Toplu
Tüketim has been acquired by Güney 2M. Under the new
structure, Duru Toplu Tüketim will contribute its certain
assets in the touristic regions of Bodrum and İzmir and
Güney 2M and Duru Toplu Tüketim will merge their
businesses in Antalya and Muğla.
3 Seas Capital Partners, acted as the exclusive financial and
strategic advisor to Duru Toplu Tüketim shareholders in
the transaction.
Duru Group
Established in 1973 in Antalya, Duru Group owns six
companies operating in the sales and distribution of food,
cleaning products, personal care products and other supplies
in the Mediterranean, Aegean and Marmara regions. A
member of the group, Duru Toplu Tüketim, is among the
leading companies of Turkey in the distribution and
wholesale of food products to hotels, restaurants and
cafeterias.
Güney 2M Dağıtım
Güney 2M has started its commercial activities in 1991
under the name "Güney Temizlik", and is the largest
company in Turkey in the distribution and wholesale of
food and daily consumption goods to hotels, restaurants
and cafeterias. Güney 2M is the domestic distributor of
many well-known brands like Unilever, Danone, Fora,
Lipton, Balparmak, Korozo and Nestle, and also exports to
the Balkans, Russia, CIS and Middle Eastern countries.
17
Camper - Coflusa SAU
Majority shares of Unitim Holding’s Camper shoes
operation, which owned the exclusive Turkey distribution
rights of Camper brand since 1998 with 15 Camper stores,
have been transferred to the Spanish retailer Coflusa Group
through an asset sale.
3 Seas Capital Partners, acted as the exclusive financial and
strategic advisor to Unitim Holding shareholders in the
transaction.
Unitim Holding
in Turkey.
Camper/Coflusa SAU
Camper was created in 1975 by a Spanish family who had
been manufacturing shoes since 1877 and Camper opened
its first store in Barcelona in 1981. Camper shoes are sold
at over 3,500 stores globally. Today, Spanish Coflusa SAU,
the owner of Camper shoes, also operates in the tourism
sector with hotels and restaurants.
18
Tommy Hilfiger Turkiye
Tommy Hilfiger USA
Unitim Holding, which held the franchise and distribution
rights of Tommy Hilfiger, one of the best known and highly
regarded fashion brands in the world, for Turkey and CIS
(former Soviet Union countries) since 1998 with 33 Tommy
Hilfiger stores in Turkey, transferred its 33 stores, franchise
and distribution rights to Tommy Hilfiger Marka Dağıtım
ve Ticaret A.Ş.
3 Seas Capital Partners has managed this process on behalf
of Unitim Holding shareholders and provided financial
and strategic advisory throughout the transaction which
has been completed in April 2009.
Unitim Holding
in Turkey.
Tommy Hilfiger
One of the world’s most renowned fashion brands, the USbased Tommy Hilfiger has 900 stores in 65 countries. Under
the registered brand name of Tommy Hilfiger; Tommy
Hilfiger Corporation has men’s and women’s collections,
jeans, golf wear, sports and kids lines. With an approximate
turnover of USD 3 billion, Tommy Hilfiger supplies
accessories, shoes and fragrances through license
agreements.
Deals Completed in Previous Years
a JV between Turkcell and TeliaSonera
Istanbul, Turkey
Istanbul, Turkey
has acquired a 50.12% stake in
has acquired the remaining 50% interest in
has acquired the remaining 35.7% shares of
from
Azerbaijan Information
and Communication Technologies Ministry
The undersigned acted as advisor to Fintur Holdings
in the transaction
March 2008
Istanbul, Turkey
The undersigned acted as advisor to Akkardan
in the transaction
October 2008
Fina Turkon Holding A.fi.
Istanbul, Turkey
The undersigned acted as advisor in the transaction
Nowember 2008
Fintur Holding - Azercell
Bossa - Akkardan
Fina Turkon Holding
In March 2008, Fintur Holdings, a joint
venture between TeliaSonera and
Turkcell, acquired 35.7% shares of
Azercell from Azerbaijan Information
and Communication Technologies
Ministry through a privatization
valued at USD 180 million. Azercell is
the largest GSM operator in Azerbaijan
with more than three million
subscribers.
Akkardan, the leading Turkish
automotive parts manufacturer,
acquired 50.12% stake in Bossa, a
leading textiles manufacturer owned
by Sabancı Holding, based on a total
equity value of USD 152.5 million.
In November 2008, Fina Holding
acquired 50% stake in Fina Turkon
Holding (owner of Kumport Liman
İşletmesi A.Ş.) from Turkon Holding.
3 Seas Capital Partners acted as the
exclusive financial and strategic
advisor to Akkardan in the transaction.
Following the acquisition advised by
3 Seas Capital Partners, Fina Holding
became the sole owner of Fina Turkon
Holding (currently operating as: Fina
Limancılık Lojistik Holding A.Ş.).
advisor to Fintur Holdings in the
transaction.
Istanbul, Turkey
has acquired a 50% interest in
Istanbul, Turkey
Abraaj Capital
Dubai, UAE
has acquired certain assets belonging to
has acquired a 50% spake in
Turkon Fina Denizcilik A.fi.
Istanbul, Turkey
The undersigned acted as advisor
in the transaction
Nowember 2008
Istanbul, Turkey
Istanbul, Turkey
The undersigned acted as advisor in the transaction
August 2008
The undersigned acted as advisor to Maxi Supermarkets of
Hamo¤lu Group the in transaction
August 2008
Turkon Fina Denizcilik
Numarine - Abraaj Capital
Maxi - Migros
Turkon Holding, one of the leading
Turkish conglomerates, acquired 50%
of the shares of Turkon Fina Denizcilik
from Fina Holding. Following the
acquisition, Turkon Holding became
the sole owner of Turkon Fina
Denizcilik.
Abraaj Capital, the premier private
equity firm in the Middle East region,
acquired a 50% stake in Numarine, one
of the leading performance motoryacht
manufacturers in Turkey.
Migros, the leading supermarket chain
in Turkey, acquired certain assets
belonging to Maxi Supermarkets, a
local supermarket chain operating in
the Marmara region.
3 Seas Capital Partners managed this
acquisition process on behalf of the
Numarine partners and acted as the
exclusive financial and strategic advisor
to Numarine in the transaction.
advisor to Maxi Supermarkets and its
owner Hamoğlu Group in the
transaction.
advisor in the transaction.
19
Hygeia
Athens, Greece
&
Athens, Greece
have acquired a 50% interest in
fiafak Health Group
Istanbul, Turkey
The undersigned acted as advisor to Hygecia and Marfin
September 2008
Istanbul, Turkey
have acquired
Kendir Keten Sanayi T.A.fi.
Istanbul, Turkey
The undersigned acted as advisor to Makyol and
Bo¤aziçi Yat›r›m A.fi.
September 2008
Marfin Investment - fiafak Hastaneleri
Kendir Keten - Bo¤aziçi / Mak-Yol
Hygeia, the healthcare group owned
by Marfin Investment Group
(a leading Greece-based investment
holding company) acquired 50% stake
in Şafak Health Group which has four
hospitals in İstanbul.
Kendir Keten Sanayi T.A.Ş. was
acquired by Mak-Yol İnşaat Sanayi
Turizm ve Ticaret A.Ş. and Boğaziçi
Yatırım A.Ş.
advisor to Hygeia and Marfin
Investment Group in the transaction.
Yeniköy Turizm - Carlton
20
Istanbul, Turkey
&
Bo¤aziçi Yat›r›m A.fi.
advisor to Mak-Yol and Boğaziçi
Yatırım in the transaction.
Tiger Global / Mynet - Yonja
In January 2008, Yeniköy Turizm, an
Istanbul-based real estate investment
company, acquired the land plot in
Yeniköy prominently known as the
Carlton Hotel for YTL 70 million, in an
auction organized by Turkey's Savings
Deposit Insurance Fund.
The Tiger Global Private Investment
Partners (“Tiger Global”), a New
Yorkbased private equity fund, and
Mynet, the leading Turkish Internet
portal, acquired 50% of San
Francisco-based Yonja LLC, owner
of international community and
friendship site www.yonja.com.
advisor to Yeniköy Turizm in the
transaction.
advisor to Mynet and Tiger Global
in the transaction.
FARINVEST
Bo¤aziçi Turizm
Yat›r›m Ltd.
Istanbul, Turkey
has acquired
51% of
acquired
Yeniköy Turizm
Yat›r›m Ltd.
‹stanbul, Turkey
has won the tender for
the privatization of
Istanbul, Turkey
owner of:
Istanbul, Turkey
The undersigned acted as advisor to
Bo¤aziçi Turizm
November 2007
FarInvest - Mata
FarInvest, a Turkey-based
investment company investing
mainly in the automotive industry,
acquired 51% of Mata Automotive,
a producer of automotive spare parts
and internal wooden parts.
advisor to FarInvest in the
transaction.
Derince Port
Istanbul, Turkey
FarInvest
November 2007
Bo¤aziçi - Sait Halim Pafla
Mansion
Boğaziçi Turizm, an Istanbul-based real
estate investment company, acquired
Yeniköy Turizm, another Istanbul-based
real estate investment company that
owns the operating rights of Sait Halim
Paşa Mansion located by the Bosphorus
in Yeniköy district.
to Boğaziçi Turizm in the transaction.
Türkerler Group
September 2007
Türkerler Grubu - Derince Port
Türkerler Group, a leading Turkish
company active in construction,
energy, tourism, real estate and textile
industries, won the tender of Derince
Port organized by the Turkish
Privatization Administration, for
USD 192.5 million.
advisor to Türkerler Group during
the tender process.
Lift Medya
London, UK
Istanbul, Turkey
has invested in
has raised acquisition financing for
ÇAM TOURISM
INVESTMENTS LTD.
Istanbul, Turkey
Eko Finans in the transaction
July 2007
Nicosia, Cyprus
The Group of Private Turkish Investors
in the transaction
June 2007
Kampus
Istanbul, Turkey
The undersigned acted as advisor to Lift Medya
in the transaction
July 2007
Eko Finans Factoring - Bancroft
Çam Tourism Investments
Lift Medya - Kampüs
Bancroft, a private equity firm that
has been active exclusively in Eastern
Europe since 1989, acquired minority
interest in Eko Finans Factoring, a
Turkish factoring services provider
focusing on small to mid-size
enterprises with 15 branch offices
countrywide.
A group of private Turkish investors
acquired Çam Tourism Investments, a
company holding certain real estate
properties in Cyprus.
Lift Medya, the leading indoor
advertising company in Turkey,
acquired Kampüs together with its
subsidiary Okul, the leading indoor
advertising companies active in
universities and high schools,
respectively.
advisor to Eko Finans Factoring in
the transaction.
to the group of private Turkish investors
in the transaction.
advisor to Lift Medya in the transaction
and its acquisition financing.
21
Istanbul, Turkey
and
Istanbul Free Trade Zone Operations, Inc
Istanbul, Turkey
has acquired
has acquired majority shareholding in
Istanbul, Turkey
have acquired
Virginia, USA
Nicosia, Cyprus
Fina and Turkon in the transaction
May 2007
ISBI in the transaction
January 2007
TeliaSonera subsidiary Fintur in the transaction
July 2007
Fina/Turkon - Kumport
‹SB‹ - DOBA
TeliaSonera - MCT
Kumport, one of Turkey's leading
container ports, was acquired by Fina
Holding and Turkon Container
Transportation & Shipping for USD 255
million.
İSBİ, Turkey's leading free trade zone
& logistics center management
company, acquired majority
shareholding in Doba Investments, the
founder and operator of Famagusta
Free Zone in Cyprus.
TeliaSonera, the leading Scandinavian
and Baltic telecom company, acquired
100% of MCT, a U.S.-based company
with majority controlling shareholdings
in three Eurasian GSM operators in
Uzbekistan and Tajikistan, and a small
minority interest in the leading GSM
operator in Afghanistan, for an
enterprise value of approximately USD
300 million. MCT assets will be
managed by Fintur Holdings, which
is TeliaSonera's subsidiary in the region
with majority holdings in leading
mobile operators in Kazakhstan,
Azerbaijan, Georgia and Moldova.
to Fina Holding and Turkon Container
Transportation & Shipping in the
transaction, which was completed in
three months.
advisor to İSBİ in the acquisition.
exclusive investment advisor to Fintur
Holdings in the transaction.
Turkuaz fiirketler Grubu
Farplas Oto Yedek Parçalar› Afi.
‹stanbul, Turkey
Almaty, Kazakhstan
and
has acquired
Istanbul, Turkey
has acquired
Öncü Dayan›kl› Tüketim Mallar› Afi.
Istanbul, Turkey
Farplas in the transaction
have formed a
JV in building chemicals
production in Kazakhstan
Istanbul, Turkey
Turkuaz in the transaction
Mynet in the transaction
June 2007
August 2006
November 2006
Farplas - Öncü
Farplas, one of the leading Turkish
plastic injection producers for
automotive OEM manufacturers,
acquired 100% shareholding in Öncü,
the leading supplier of ABS-based
products to commercial vehicle
producers in Turkey.
advisor to Farplas in the transaction.
22
Turkuaz - Henkel
Mynet - beyazperde.com
Henkel, one of the largest Europeanbased, global chemicals company,
signed a joint venture agreement with
the shareholders of Turkuaz, the
leading distributor in Kazakhstan. The
joint venture company will produce
building materials for Kazakhstan and
the surrounding markets.
Mynet, the leading Turkish Internet
portal, acquired Turkey's leading
cinema portal , beyazperde.com.
3 Seas Capital Partners acted as
exclusive financial and investment
advisor of Turkuaz in the transaction.
advisor to Mynet in the transaction.
TIGER GLOBAL
Istanbul, Turkey
has acquired
TIGER GLOBAL
NY, USA
NY, USA
has invested in
has acquired minority shareholding in
Desas Ticari Araçlar Kiralama A.fi.
Istanbul, Turkey
Istanbul, Turkey
Istanbul, Turkey
Docar in the transaction
Lift in the transaction
Mynet in the transaction
June 2006
February 2006
June 2006
Docar - Renty
Lift - Tiger
Mynet - Tiger
Docar, one of the leading Turkish
operational fleet leasing companies,
acquired 100% shareholding in Desas,
the leading commercial vehicle leasing
company in Turkey operating under
“Renty” brand.
Tiger Global, a New York-based
private equity fund, acquired minority
interest in Lift Medya, the leading
indoor advertising company in Turkey.
Tiger Global, a New York-based private
equity fund, acquired minority interest
in Mynet, the leading Turkish Internet
portal.
advisor to Lift Medya in the
transaction.
advisor to Mynet in the transaction.
to Docar in the transaction.
Tokyo, Japan
and
Panda Shipping Ltd.
Istanbul, Turkey
Kuwait
has acquired majority shareholding in
have created a Shipping Joint Venture
“K”Line Turkey
Istanbul, Turkey
Istanbul, Turkey
Panda in the transaction
Docar in the transaction
January 2006
April 2005
Panda - K-Line
Docar - TII
Kawasaki Kisen Kaisha Line (“K Line”),
one of the largest Japan-based global
transportation companies, signed a joint
venture agreement with the
shareholders of Panda Shipping.
The International Investor (“TII”), a
leading Middle Eastern investment
group, acquired majority shareholding
in Docar, one of the leading operational
fleet leasing companies in Turkey.
3 Seas Capital Partners acted as
exclusive financial and investment
advisor to Panda Shipping in the
transaction.
advisor to Docar in the transaction.
23
IMAP 2009 Global Mergers and
Acquisitions Symposium
3 Seas Capital Partners hosted IMAP’s 2009 Global Mergers and
Acquisitions Symposium. Over 200 M&A specialists, investors
and businessmen attended the symposium from all around the
world.
26
The International Network of M&A Partners (IMAP)
2009 Global Mergers and Acquisitions Symposium
was hosted by 3 Seas Capital Partners on October
22-25, 2009 at the Çırağan Palace Kempinski Hotel
in İstanbul. IMAP members from 35 countries
throughout 5 continents were joined by Fiba Holding
Chairman Hüsnü Özyeğin, Marfin Investment
Group CEO Dennis Malamatinas, Lukoil
International Trade and Supply Company
(LITASCO) Group CEO Gati Al-Jebouri and
Hürriyet Media Group Chairman Vuslat Doğan
Sabancı. More than 200 M&A specialists, investors
and businessmen attended the symposium where
Hon. Jose Maria Aznar, the former Prime Minister
of Spain, was the keynote speaker.
27
The IMAP 2009 Symposium,
organized under the Intercontinental
Collaboration title, found wide
coverage in all media outlets, and was
pointed out as one of the most
important international conferences
held in Turkey in 2009 next to the joint
summit held by the World Bank and
IMF in Istanbul in October.
The International Network of M&A
Partners (IMAP), comprised of leading
Mergers and Acquisitions advisors
with 50 offices in 35 countries,
organized its annual meeting in
Istanbul under the title of
“Intercontinental Collaboration”
housed by 3 Seas Capital Partners.
28
Unlike IMAP’s previous annual
meetings, this meeting was open to
participants other than IMAP
members for the first time. A wide
range of participants including
partners and executives of many
multinational corporations, as well as
IMAP's regional experts on various
sectors and countries, and
businessmen from all around Turkey,
especially from Mersin, Adana,
Ankara and İzmir found the chance
to interact and discuss business
opportunities.
David Kean, the well-known English
business author , was the moderator
of IMAP 2009 Symposium with panels
headlined:
"The Global M&A Transaction Circa
Fall 2009 – A 360-Degree Perspective"
concentrating mainly on cross-border
M&A transactions, "The M&A
Marketplace – A Global Update"
attended by top level IMAP partner
M&A advisors from four continents,
and Vuslat Doğan Sabancı's
presentation "Turkey's Global and
Continental Connection – A Media
Perspective". In addition, exclusive
presentations prepared by IMAP's
global transaction teams in IT, Energy,
Outsourced Services, Retail and
Consumer Brands, Food,
Construction, Automotive and
Healthcare sectors took place
throughout the Symposium.
3 Seas Capital Partners successfuly hosted the International Network of Mergers and
Acquisitions Partners (IMAP) 2009 Global Mergers and Acquisitions Symposium on October
22-25, 2009.
250 bilateral discussions took place at
40 tables
The afternoon sessions of the
symposium attended by investors
from various countries, were closed
to the press where IMAP specialists
held nearly 250 bilateral discussions
at 40 different desks and shared
information on various sectors and
countries.
In addition to Istanbul,
representatives from many Anatolian
companies attended these sessions
where IMAP’s sector specialists made
presentations on the current status
of energy, transportation, services,
packaging and food sectors as well as
possible upcoming business
opportunities to emerge in the new era.
During the symposium, in addition
to the sectoral discussions, there were
also bilateral discussions where
IMAP representatives from various
countries shared business
opportunities in their countries and
information on companies intending
to invest in Turkey. In these
discussions Russia, Italy, Spain,
Eastern European and Gulf countries
were prominent as the countries
eager to invest in Turkey. IMAP
country representatives stated that
Egyptian investors were interested
in textiles, healthcare,
pharmaceuticals; US investors were
interested in manufacturing, energy,
real estate; and United Arab Emirates
(UAE) investors were interested in
construction, logistics, energy, and
British investors were interested in
chemicals and energy sectors.
Our sponsors who are the leading
service providers in the Turkish M&A
sector also showed great interest in
the Symposium. Our media sponsor
Hürriyet Newspaper, our Golden
Sponsors; Esin Law Firm, Lamda
Partners and Freshfields Bruckhaus
Deringer Law Firm, our Silver
Sponsors; Stanton Chase
International, Esen Plastik, Martin &
Martin, Balcıoğlu & Selçuk Law Firm,
Sterling Office and Türkerler Group
supported us throughout the
Symposium.
29
IMAP President Mark Esbeck:
"The most important thing in our line of work is the result. Our clients’ only
focus is the result, and they reward our services solely for this reason.”
IMAP believes that substantial economic
opportunities are rising in Southeastern
Europe and Middle East regions. Being
the leader in M&A activities within these
markets and having large volumes in
completed transactions, IMAP strongly
believes that Turkey has gained incredible
strategic importance due to its
geographical status as the virtual bridge
between Europe and Asia, with a
population of approximately 80 million,
as the 6th largest economy in Europe, and
the 20th largest in the world.
IMAP's representative in Turkey, 3 Seas
Capital Partners, boasts a leadership
position within its sector as an M&A
advisory firm. The most important thing
in our line of work is the result. Our clients’
only focus is the result, and they reward
our services solely for this reason. In this
respect, the 3 Seas team consists of
professionals who strive to get results and
provide excellent customer service. This
is why they are Turkey’s number one
M&A advisory firm. As IMAP, we are
extremely proud of the success of the
conference and symposium – not to
mention the high level of esteem that it
brought to IMAP and IMAP members in
Turkey and the rest of the world.
Former Prime Minister of Spain
Jose Maria Aznar:
"We are aware of the importance
that trade with Europe carries for
the Turkish economy. Turkey has
an essential responsibility in this
area."
The Turkish economy performed
well and gained influential results.
I do not believe that was just a
coincidence. Sustainable macro
economic stability, liberisation and
open competition - especially in
monopolist markets - will continue
to ensure even greater advantages
in terms of bringing prosperity to
Turkey. Such developments will
ensure that per capita income in
30
Turkey will rise to the average of
Europe.
In the instance of Turkey’s decisive
commitment to globalisation and free
market economy, Turkey’s rate of
modernization will rise. The energy
sector also thrives on the free market
economy. We all know that Turkey,
due to its geographical location, is
in an extremely important position
concerning the transport of energy
to Europe.
We are also aware of the importance
that trade with Europe carries for the
Turkish economy. Turkey has an
essential responsibility in this area.
Because of this Turkey now also has
to show that they have embraced
globalisation, and substantiate their
importance in the European and
Asian regions through their success
within the framework of free society
principles and free market economy
principles.
F‹BA Holding Chairman
Hüsnü Özye¤in:
"Local firms such as 3 Seas hold advantages in terms of having
a better command of the local culture, following the market
closer, associating themselves with the Turkish people and being
flexible."
There are times when M&A transactions
lead to extraordinary results. For
example, at a time when you had
absolutely no intention of buying or
selling a company, the CEO of 3 Seas Şevket Başev - comes along and sells
you a container port. We would have
never imagined that our Group would
one day own a port, especially
considering that this port constitutes
13% of Turkey’s total container traffic
volume both domestically and
internationally.
I don’t think it is essentially necessary
for large investment banking firms to
enter countries like Turkey and Russia.
Due to the crisis, there are investment
bankers serving Turkey from abroad.
Local firms such as 3 Seas hold
advantages in terms of having a better
command of the local culture, following
the market closer, associating
themselves with the Turkish people and
being flexible. It takes 2-3 weeks alone
to mandate a London based investment
bank for a sale process. In our purchase
of the USD 200 million container port,
we didn’t even sign a mandate
agreement upfront, yet 3 Seas
represented us and we saved a
considerable amount of time. You will
never witness anything like this abroad,
and this is the definition of cultural
difference.
Hürriyet Media Group Chairman
Vuslat Do¤an Sabanc›:
"We want to become the leader of this region which
covers a population of nearly 300 million."
Vuslat Dogan Sabanci announced that
through their acquisition of Trader
Media East (TME) in April 2007, they
aim to become the region’s largest
classified ads group. She also shared
the details of the acquisition process of
TME, which she introduced as the
“tenants of Hurriyet Media Towers’
12th floor”. Sabanci explained how they
succeeded in achieving the largest
acquisition abroad during that period,
and how they managed to move the
headquarters of a London Stock
Exchange-listed company from Paris
to Istanbul. "This acquisition was a
significant experience for us all. But the
most important part was what we
learned after the sale," said Sabanci,
and concluded: "We not only want to
be the largest classified ads group in
print media, but also on the Web. This
includes Turkey as well. In other words,
we want to become the leader of this
region which covers a population of
nearly 300 million."
31
Lukoil International Trade and Supply Company (LITASCO) Group CEO
Gati Al - Jebouri:
Gati Al-Jebouri explained
LUKOIL’s latest investments,
mainly in Turkey and Europe;
and pointed out the investment
strategies and value accretion
that LITASCO experienced
during these processes. Al –
Jebouri explained the
important approaches that
comprise the Group’s strategy
as; the right choice of location,
refineries that possess high
Solomon Ratings, financial
efficiency and cost
optimisation, synergy creation
by international and local
assets, joint development of
corporate structure and
building the right platform for
the required steps to be taken
for further growth.
Al-Jebouri also provided
valuable information regarding
cross-border acquisitions and
highlighted the importance of
making an effort to integrate
with the local culture and
forming an enhanced harmony
with employees and local
authorities, ensuring the
development of new
operational information in
order to enhance local
processes. He further stressed
the vital role of integration in
improving the existing
commercial activities of new
assets, and the search for the
best relevant examples globally
in order to attain success.
Lukoil International Trade and Supply
Company (LITASCO) Group CEO, Gati
Al - Jebouri, explained Lukoil’s latest
investments, mainly in Turkey and
Europe.
Marfin Investment Group CEO
Dennis Malamatinas:
The CEO of Marfin Investment Group, Dennis Malamatinas, made important assessments pertaining
to the 3rd quarter of 2009.
Presenting the international projects
of Marfin Investment Group,
Malamatinas made important
assessments pertaining to the the 3rd
quarter of 2009. Mentioning that all
markets became extremely appealing
during this period, Malamatinas
underlined the incredible opportunity
that emerged for investors who have
cash on hand as they can take
advantage of lowered prices. Mr.
Malamatinas also emphasized the fact
that investors who can act fast are
bound for substantial gains. Pointing
out that the financial services and
transportation sectors have become
attractive investment options during
this period, Malamatinas stated that
especially in the financial services, asset
32
bases have grown and their quality has
increased. However, this growth has not
been reciprocated with the capital
adequacy levels, and when combined
with the low potential in capital increase,
this situation provides excellent
opportunities for investors. Indicating that
the crisis has led to an abundant amount
of accrued
equipment in the transportation sector,
Malamatinas pointed out that the
price of these equipments have
reached historic lows, and for
experienced investors with a
disciplined approach for financial
resource development at hand, it is
highly possible for these companies
to be brought back to lucrative levels.
Malamatinas explained that the
prominent components of the last
quarter of 2009 were smaller scale
agreement preferences, and inclination
of the investors who were affected
from macroeconomic developments
towards transactions that carry lower
levels of debt. Malamatinas also drew
attention to the fact that legal aspects
of contracts have gained an eminent
importance in the M&A world.
Freshfields Bruckhaus Deringer Law Firm Managing Partner
Dr. Willibald Plesser:
Blaming the lack of liquidity and available assets for the dropoff in M&A activity, Plesser underlined that differences between
nations are slowly eroding.
Starting off his speech by addressing
the latest M&A trends in Europe,
Plesser pointed out that changes in
the markets have brought forth
changes in quality of goods and
services; and that the balance of
power between the buyer and seller
has also been altered in paralel.
Blaming the lack of liquidity and
available assets for the drop-off in
M&A activity, Plesser underlined
that differences between nations are
slowly eroding. Addressing the
developments in the market, Plesser
stated that acquisition costs are often
financed by borrowing instead of
existing resources, and that resorting
to share swaps, along with deferred
and conditional payment options
are becoming more prevalent.
Listing other developments such as;
the tendency to buy from weakened
sellers, conditionality, preference
towards alliances and jointventures, Plesser indicated that
especially in joint-ventures; factors
such as the sharing of risks,
combined balance sheets, strategic
partnerships, synergies that are
created without any extra payments,
and the consolidation of
management skills, are important
factors of preference.
3 Seas Capital Partners CEO fievket Baflev:
Stating that the crisis can be transformed into an opportunity for growth, Baflev pointed out that the
transformation and adaptation capacity of the organization, combined with the changing competitive
environment hold the key to creating this opportunity.
Starting his presentation with the
significant transactions that 3 Seas
Capital Partners have accomplished in
the last three years, Başev particularly
touched upon the dynamics of the crisis
and the approaches that came forth
with it. Identifying the first strategy
that emerges during crisis periods as
survival, Başev stated that the crisis
can be transformed into an opportunity
for growth, and pointed out that the
transformation and adaptation capacity
of the organization, combined with the
changing competitive environment,
hold the key to creating this
opportunity. Indicating that M&A
activities are a very powerful and
effective choice in terms of growth for
organisations and that many
opportunities have arisen in this field,
Başev stated that the increased rate of
bargaining options, the synergy in
revenues and costs, the increase in
market shares, productivity and
innovation possibilities, all support
these opportunites. Şevket Başev stated
that despite the advice of conventional
knowledge to suspend new
investments and M&A transactions
during periods of change in the
markets; the experience of successful
companies during times of financial
crisis, prove the absolute opposite.
Başev further mentions that ‘risk’ is
the key word here, and that there is an
increase in the rate of risks pertaining
to acquisitions during times of crises.
“However there are preventive actions
that can be taken” Başev continued:
“to be selective; to determine the goals
and strategies well, to analyze and
manage risks, to exercise due diligence
in the work and calculations that are
done; and to cover undefined risks in
these calculations by relevant
agreements and insurance policies, to
share the risks with the seller; and most
importantly, to work with the best
advisors during this period are vital
factors in risk management.”
33
After a Successful IMAP Meeting
34
At the end of IMAP’s 2009 Global Mergers and Acquisitions Symposium, IMAP Chairman
Karl Fesenmeyer and on behalf of the 3 Seas Capital Partners team hosting the meeting,
fievket Baflev were presented with plaquets. fievket Baflev was elected as IMAP’s board
member for the EMEA (Europe, Middle East and Africa) region.
35
At times of economic recession, while their competitors reach a point
where they halt M&A
activities, successful competitors
capitalize on the opportunity to shape their sectors.
36
A New Era in Investment and M&A
‹brahim Ar›nç
2009 has been a different year in many
aspects. The global financial crisis,
which showed its initial effects towards
the end of 2008, managed to turn all
trends upside down and drastically
changed all concepts, regularities and
standards that we were so sure of.
Whether the standards have only
slightly changed, or they have been set
from scratch is a question which we
believe will be answered in a very short
period of time. From another aspect
however, as much of a cliché as it may
be, the phrase “Every crisis is a new
opportunity” is also about to prove to
be true very soon with the unfolding
of this particular crisis. The year 2009
has been the year of introducing brand
new perspectives to all concepts.
Meanwhile, the M&A market has
started to show fundamental changes,
and we firmly believe that a number
of these essential changes will prove to
be permanent milestones from the year
2010 onwards. We expect the different
approaches that have come to rise and
have marked the M&A transactions in
2009, such as perception and pricing
of risk, reevaluation of partnership and
acquisition principles and the valuation
of various performance criteria will all
continue as the new trend from 2010
onwards.
Successful Competitors
During times of financial crises, the
first instinct is to “survive” and hence
to prioritize survival strategies. On the
other hand, the idea of turning the crisis
into a tool of opportunity and growth
is another option. For companies who
think strategically and wish to grow,
those who strive to enter the
competitive arena and move on to
organizational changes, M&A
transactions are the most powerful and
effective method. M&A transactions
also bring forward many opportunities
with regards to strengthening
bargaining power and abilities,
maintaining revenue and expense
equilibrium, increasing market shares,
and assisting companies who wish to
improve productivity and innovation.
Even though conventional wisdom
have been known to advise placing a
freeze on new investments and M&A
opportunities in times of crises and
turmoil, a study conducted by
McKinsey covering the last 18 years
and 1,000 corporations, has shown that
the companies classified as 'successful
competitors' were organizations that
showed an increase in their appetite
for growth and acquisition during
times of economical downturns, in
comparison to their competitors.
Consequently, while competitors
reach a point where they halt M&A
activities at economic recession periods,
successful competitors capitalize on
the opportunity to shape their sectors,
notwithstanding the fact that they may
also be suspending some of these
activities. However, these merger
and acquisition transactions pose
particularly greater risks during
times of a financial crisis.
Companies must be selective and set
their goals well, the ability to manage
37
these risks successfully is a prerequisite
for success.
The managability of risks is dependent
on two main criteria: that it is possible
to calculate the risks, and that they are
well analyzed. Pinpointing certain
factors that may cause risks, dissecting
the computable risks and thoroughly
analyzing them will make the
management process of these particular
risk factors much easier. It is critical
that that the due diligence process one of the most important phases of
the M&A transaction - is conducted in
as much detail as possible, so that
foreseeable and computable risk factors
can be unearthed. Covering those risks
that could not be calculated during the
due diligence process with
shareholders' and share purchase/sale
agreements, and with relevant
insurance clauses, make these risks
more manageable. Applying the risk
to the valuation parameters of the
M&A process also makes it possible to
assign a price/value to certain risks
and to corelate the various risk factors
with different valuations. The
application of sensitivity analyses,
along with multiple evaluation
parameters can open the door to a
variety of valuation mechanisms.
These risk analyses and their various
evaluations also provide the buyer with
the opportunity to share these risks
with the seller.
Sharing the Risk
A number of arrangements can be
made to share the risks with the seller
for a limited period following the
completion of the acquisition/takeover process. Such possible
arrangements are; (i) acquisitions in
38
tranches (gradual acquisition /takeover
of shares over an extended period of
time), (ii) conditional payment
schedules, (iii) performance based
payments and triggering events (iv)
payment of certain management fees
to the buyers for a specific period of
time; which can be established through
agreements. In any case, for an M&A
transaction to be completed with the
least amount of risks and pitfalls, it is
vital to work with the best financial
and legal advisors.
From 2010 onwards, it will be
inevitable to come across
unprecedented changes and different
methodologies in the perception,
analysis, calculation and prevention of
deal related risks. Another change we
have started to observe in this area is
the fact that investors and funds
originating from the US and Western
Europe who have, to date, always been
the pioneers of the M&A market, are
now having to compete with Middle
Eastern, Asian, and other contenders
who gain their strength from
developing economies, for investment
opportunities. It is no longer
uncommon to see buyers from
developing nations to successfully
structure large-scale strategic
acquisitions in developed countries as
if to confirm the phrase "Globalisation
is not a one-way street!"
New Actors on Stage
With the dawn of this new era in the
M&A world, big actors in growing
economies such as China, India, Russia,
Brazil, Turkey, Mexico, Malaysia, South
Africa and UAE, are now looking for
the opportunity to enter the global
stage. With all the brand new tactics
and skills that have been brought along
by these new actors, they will prove to
have great capabilities in terms of
flexible and experienced valuation, and
strength to evaluate risks and
opportunites in developing countries
much faster and more accurately.
As well as the different perspectives
these new actors will be introducing
in terms of risk discovery and
assessment, it is also expected that they
will be extremely competitive in their
own local markets, and will have the
ability to adapt very quickly to
competitive changes in these arenas.
In this new M&A age, especially when
recovering from the crisis that we
experienced during 2008-2009,
sovereign wealth funds in various
nations that played a key role and
capitalized certain opportunities that
arose, will be taking their place
amongst the emerging and effective
actors of the future. In light of all these
new developments and analyses, this
last financial crisis has brought forth
new approaches for buyers in terms of
risk perception and the sharing of risks
with the sellers. To articulate in detail,
first of all, buyers developed a larger
variety of payment strategies in
comparison to the past. Some examples
of these are:
Cash payments and existing sources
instead of going to capital markets
for debt or stock issuance
Vendor debt financing
Equity swaps
Eearn-outs or other deferred
payments
On the other hand, the particular
matters that buyers from a weakened
seller have to focus on have become
M&A Deal Terms: Conditionality and Other Contentious Issues
Pre-crunch
Now
conditions
Material Adverse Change (MAC) clauses not common
Anti-trust rulings tending towards hell or high
MAC clauses increasingly requested, but
not increasingly given
Financing
Move towards more “guaranteed” funds
Similar positions, though renewed focus on timing
Vendor financing has become a substantial alternative
Risk allocation
Limited warranties,
capped warranties, full
disclosure was not always required
More comprehensive warranty packages, bigger caps requested
Measures like warranty and indemnity insurance increased
Pricing
Locked box increasingly
common including trade sellers
(not just Private Equity funds)
Reverting to completion accounts
Termination rights /
more crucial and evident than ever. We
can list these matters under the
following main headings:
Seizing the opportunities that have
risen from the economic downturn
Bilateral negotiations rather than
auction oriented deals where more
than one investor candidate is
involved in the sale process
Different approaches for due
diligence
More warranty and indemnity
protection
More arrangements that include
escrow agreements
In the year 2009, investors resorted to
much more detailed research and
mechanisms which helped them feel a
higher degree of security when it came
to conditional and disputed matters
with reference to M&A transactions.
We can clearly see the major differences
before and after the crisis in areas such
as termination rights/terms, acquisition
financing, distribution of risks and the
pricing process itself.
Exit related issues
It is now the norm to be extremely
cautious with every step of a
transaction, to obtain warranties, and
to have insurance policies covering
every area possible in order to minimize
risks during the transaction and after
deal closing.
In such an environment where all these
major changes have taken place, and a
number of important and rare
opportunities have presented
themselves, it is without any doubt that
companies who have the required
flexibility and agility, will have the best
chance to step ahead of their
competitors provided that they
successfully analyze and reduce the
risks in question.
Another trend that has taken its place
in the M&A world is the rise of alliances
and joint ventures as an alternative to
mergers and acquisitions. Some of the
reasons for this new trend can be listed
as:
• Rationale
Sellers reluctant to sell 100%
Sharing the risks
Balance sheet
Strategy
Synergy without premiums
Management experience
• Control
Deadlocks
Disruptions to management
It is definitely a reality that M&A
transactions are not risk-free; however,
companies who have the ability to
calculate and analyze these risks, and
most importantly, who never make a
concession regarding their controlled
growth principles even in times of
crises, will not only hold an important
role in their sector, but will also become
successful competitors who pioneer
in shaping their sectors.
39
Global View of 2009 M&A and
Expectations from 2010
Demir Demirba¤ - Bekir Y›ld›r›m
Certain sectors are expected to follow through major increases in M&A transactions in
the near future, especially the food, pharmaceuticals and energy sectors which went
through substantial world wide consolidation in the pre-crisis period.
Having emerged in the last quarter of
2008, the global financial crisis not only
affected all markets and sectors in the
year 2009, but also caused considerable
decreases to be recorded in numbers
and volumes of M&A transactions. In
the previous years, the total transaction
volumes that had reached the level of
approximately 3 trillion dollars,
dropped to 2.1 trillion dollars in 2009.
The number of transactions that
previously reached numbers in the
likes of 43 thousand, fell to levels of
38 thousand in 2009.
Even though the downfall in total
transaction volumes reached a high
40
level like 40%, the fact that the number
of transactions dropped by only 10%,
assured us that the dreaded risk of
returning to national economies is not
that high afterall.
M&A transactions are considered to
be one of the major indicators of
globalization in the world economy. It
is expected that the revival observed
in the M&A transactions in the last
quarter of 2009, when the first signs of
recovery were visible, will likewise
continue into 2010. It is also expected
that with the closure of large-volume
transactions which could not be
completed in 2009, previous volume
levels will be reached.This futher
proves that the M&A market is not as
speculative or fragile when compared
to the other financial markets, instead
it has become one of the main markets
that is renowned for showing stability
and continuoıus improvement.
The reason shown for the serious drop
in transaction volumes is the decrease
in the number of large deals closed,
and the main reason for this was the
reluctance of banks to provide
financing in an environment of crisis.
Considering the gradual shifting of this
attitude, it would be safe to assume
that starting from the second quarter
TARGET COUNTRIES WITH THE MOST TRANSACTIONS IN 2009
USA
UK
Others
%21
Holland
%3
-%40
-%9
Australia
USA
%34
Spain
%3
Brazil
%3
Canada
%4
UK
%12
Germany
%4
%43
%23
Japan
China
-%21
Germany
-%23
Canada
-%25
Brazil
-%28
Spain
-%31
-%24
Holland
China
%4
Japan
%5
Australia
%7
Others
-%62
Source: Thomson Reuters
of 2010, M&A transaction volumes will
increase substantially and return to
their previous levels once again.
Even though the general trend is
showing a rise on a global level, every
country will of course experience
different levels of M&A growth
depending on their own level of
exposure to the crisis. Taking the
current indicators into account, we are
estimating that Turkey’s M&A market
will be a part of this growth trend.
Developing Countries Step Forward in 2009
M&A Transactions
24% of the completed transactions
throughout the world in 2009 consisted
of acquisitions completed in
developing countries. This is the
highest ratio to date in this category.
This increase is due to the M&A
transactions closed in economies such
as China and India, which continued
to grow at very high rates despite the
crisis.
On the other hand, governmentsupported M&A transactions made up
a total ratio of 15% among all M&A
transactions of 2009. Just like the
acquisition ratio in developing countries,
this ratio is also the highest in this
category that has been recorded to date.
Especially in western countries where
the impact of the crisis has been deeply
felt, the support of governments and
national policies in partial or complete
nationalization of bankrupt/insolvent
financial institutions caused the
increase to such transaction levels.
Companies who had the finances for
acquisitions, preferred to keep these
resources as reserve funds during most
of 2009, due the continued uncertainty
of the global crisis.
However, following the release of data
for the last quarter of the year, which
showed evidence of recovery from the
41
ANNOUNCED GLOBAL MERGERS AND ACQUISITIONS
$ VOLUME ON QUARTERLY BASIS
Q1 ‘07
Q2 ‘07
Q3 ‘07
Q4 ‘07
Q1 ‘08
Q2 ‘08
Q3 ‘08
Q4 ‘08
Q1 ’09
Q2 ‘09
Q3 '09
Q4 ‘09
Q1 ’09
Q2 ‘09
Q3 '09
Q4 ‘09
Global M&A (billion $)
NUMBER of TRANSACTIONS ON A QUARTERLY BASIS
Q1 ‘07
Q2 ‘07
Q3 ‘07
Q4 ‘07
Q1 ‘08
Q2 ‘08
Q3 ‘08
Q4 ‘08
_ Global M&A (number of transactions)
crisis, an increase in acquisition
transactions has been observed.
Interest rates sitting steadily at low
levels around the world, and
strategically well-priced purchasing
opportunities being at a boost, show
that the year 2010 is not only marked
to be the year of the end of the crisis,
but also a time when M&A transactions
will increase once again. In addition to
this, considering that the private equity
funds which were inactive during the
period of financial crisis will be more
active in the coming periods, M&A
transactions are expected to rise at
considerable rates.
42
Sectors Expected to Stand Out in 2010
The decline in M&A transactions in
this past period has mainly affected
sectors with relatively higher cash
flows that are more vulnerable to
the fluctuations in the market
such as consumer products,
media, entertainment, retail and
telecommunications – as well as the
real estate sector which was seen to be
the cause of the crisis.
On the other hand, industrial and raw
materials sectors which are perceived
to be more conventional sectors,
showed a much lower decline rate in
transaction volumes.
The only sector showing an increase in
transaction levels – the healthcare sector
- should be taken into account in a
separate realm altogether, as its rates
and trends are tied completely to the
social policies of countries.
In terms of food, pharmaceuticals and
energy sectors, which had experienced
cosiderable levels of consolidation prior
to the crisis, a high rate of increase in
M&A transactions is expected in the
upcoming periods. Depending on the
outcome of the healthcare reform in
the US, which has caused many a
showed evidence of recovery from the
TARGET SECTORS WITH THE MOST NUMBER OF TRANSACTIONS IN 2009
%100
%90
136.223
44.960
65.974
130.799
22.105
29.171
42.389
110.712
46.031
155.090
76.719
231.676
170.545
%80
377.685
142.092
122.316
Consumer Goods and Services
85.567
Media & Entertainment
Telecommunications
318.019
-%56
-%62
87.841
%70
146.623
-%51
Retail
-%70
168.808
-%46
Real Estate
%60
209.578
178.822
186.303
284.877
-%30
Technology
%50
185.457
Consumer Staples
222.327
-%72
204.132
%40
239.376
-%6
Manufacturing
342.119
%30
211.071
361.940
%0.5
Healthcare
460.279
%20
%10
-%15
Raw Materials
572.746
445.044
311.676
Energy
-%42
-%30
Financial Services
%0
2007
2008
2009
especially hospitals, can be targets of
M&A transactions yet again, as was
the case in 2009. Due to the nature of
the pharmaceuticals sector, companies
are forced towards consolidation upon
reaching a certain size. While it is hard
to estimate at this point, whether mega
transactions like last year’s purchase
of Genentech by Roche for the price of
45 billion dollars will be observed at a
global scale. Still, we can assume that
in many nations, including Turkey,
there will be a great interest particularly
in generic drug companies which will
eventuate in transactions at various
scales. In the past year, three out of the
five largest transactions in Europe was
that of the energy sector, and it is highly
expected that this trend will continue
in 2010. Being one of the most strategic
sectors for the world’s largest
economies in Europe, America, Russia,
China and India, the energy sector will
most definitely show a rise in not only
transaction amounts, but also in terms
of volume, therefore continuing to be
the favourite of the M&A market.
Along with these, a rise in the number
of transactions can also be expected in
the telecommunications, media and
retail sectors in 2010 which will
eventuate with a rise in transaction
volumes in the following periods. Real
estate and finance sectors, which were
branded as the cause of the crisis, have
been affected the most by the crisis and
are still in the process of mending their
wounds. Therefore, other than the
occasional opportunistic purchases that
may come, these sectors are not
expected to experience a high activity
rate just yet. It will also be unrealistic
to expect any activity in the automotive
sector, which is also one of the major
victims of the crisis, other than the
occasional opportunistic acquisitions
of companies in distress.
43
Address: Inşirah Sokak No: 18 34342 Bebek-Istanbul/Turkey
Telephone: +90 (212) 257 70 00 Fax: +90 (212) 257 70 05
www.3seas-cp.com

2009 closing report - 3 Seas Capital Partners

Transcription

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