THE CEE COMPANIES, ATTRACTIVE DEALS FOR LEVERAGED BUYOUT TRANSACTIONS?

• Main Author: Brîndușa – Maria BUZILǍ (cǎs. Mocanu)
• Format: Article
• Language: English
• Published: Technopress 2016-06-01
• Series: Journal of Public Administration, Finance and Law
• Subjects: leverage buyout; investment opportunities
• Online Access: http://www.jopafl.com/uploads/issue9/THE_CEE_COMPANIES_ATTRACTIVE_DEALS_FOR_LEVERAGED_BUYOUT_TRANSACTIONS.pdf

Leverage buyout in the CEE region was almost nonexistent to 2003 and limited until 2006, when both the international and local creditors, following the global trend, increased demand for mergers & acquisitions. Private equity investors prefer to investigate the characteristics of companies when select target acquisitions. Our study defines a typology of CEE companies in following criteria: profitability, efficiency, liquidity, leverage, cash - flow generated. This study can be used by investors to identify new investment opportunities in the CEE region. The study results show that on average, the sample analyzed (1428 companies CEE) during 2004-2013 is represented by large companies, profitable, efficient, with positive cash-flows, but indebted and with liquidity issues. Low percentage of investments private equity buyout in CEE (only 3% of all private equity investments in Europe) is determined by the types of companies from this region of development, the high level of leverage recorded during the analyzed period in particular.