Foreigners compete fiercely for industrial companies

Hüsniye GÜNGÖR

Pragma CEO Değer Şahbaz said that the slowdown in mergers and acquisitions that accelerated in the second half of 2022 will continue for a while in Turkey due to the stagnation created by the approaching election atmosphere among foreign investors. However, Shahbaz pointed out that there is a stable foreign interest in exporting industrial companies in good standing: “In a recent transaction, we witnessed two European companies smashing for the first time before signing. Especially strategic investors aim to both get a large market share and benefit from the production base that Turkey has proven by investing in companies in Turkey.”

Meeting with a group of press members at lunch on Monday, Pragma executives gave information about the continuing foreign interest in Turkey, preferred companies and their features. Stating that foreign investors increased the number of transactions by 28 percent with 86 deals in 2021, exceeding the average of the last five years, Pragma CEO Değer Şahbaz said, “In 2021, mergers and acquisitions transactions in the global arena are 5.8 trillion. dollar with the record. This return seen in the world was also reflected in Turkey as an increase in transaction volume, and while a record 390 mergers and acquisitions transactions were broken in Turkey in 2021, the total transaction volume increased by 12% and reached 10.1 billion dollars.

SLOWING WILL CONTINUE IN 2023

Pointing out that two different pictures emerged in 2022 in terms of company mergers and acquisitions, Şahbaz informed that in the first half of 2022, global acquisitions and mergers decreased by 23 percent compared to the same period of the previous year and fell to 2.2 trillion dollars. Şahbaz said, “In the first half of the year, there was an increase in production, especially in export companies, driven by the increasing industrial demand in the world. At the same time, thanks to the technology company funding, which is on the rise in the world, we have seen significant investments, mergers and acquisitions in both export-oriented industrial companies and technology transactions in Turkey.”

According to Shahbaz, energy The second half of the year is more difficult due to the prices of commodities and commodities, shrinking funding in Turkey and abroad, and repricing in the technology sector around the world. Stating that this trend in mergers and acquisitions will continue in 2023 globally, Şahbaz said, “The slowdown in mergers and acquisitions will continue for a while in Turkey with the effect of the recession created by the approaching election atmosphere among foreign investors.”

COMPETITIVE VALUES WILL INCREASE

Şahbaz continued as follows: “However, despite the global slowdown and trade wars, strategic investors, in particular, aim to both gain a large market share and benefit from Turkey’s proven production base by investing in companies in Turkey. In addition, Turkey’s feature of being a technology-creating base, in which Turkey has proven itself in the international arena, has caused many technology investors to invest in Turkey in the past period. Valuations are expected to remain high, driven by intense competition between strategic investors, private equity (PE) and special purpose acquisition companies (SPACs) in the coming periods.”

40 million Euro industry will establish a 20 million Euro technology fund

Pragma, which is among the financial companies with the highest number of acquisitions in Turkey, made 107 transactions with a total value of 7.5 billion dollars as of 2022, when it celebrated its 20th anniversary. Stating that the company, which has carried out 34 transactions and 2.3 billion dollars in the last five years, maintains its leadership in Turkey, Pragma CEO Değer Şahbaz said that the investments made from their own balance sheets also continue. Determining technology as its priority investment area, Pragma 2021 invested in companies such as cyber security firm Binalyze, biotechnology firm Enbiosis, and invitational dress and accessory rental company Dave Çok My Dress (DCEY). Pragma, which also invests in export-oriented industrial companies, opened a sales office in Australia for Hisar Çelik, of which it bought 85 percent in 2015. 40 million EuroStating that 50 percent of the turnover, exceeding , comes from Australia, Şahbaz said, “The total investment we made in three industrial companies, together with Betapak and Bimed, which we are partners with RSM Holding, reached 120 million Euros. We will use the experience we have gained in this field to create new mutual funds in which we will act together with institutional and large individual investors. We aim to establish an industry fund of 40 million Euros and a technology fund of 20 million Euros”.

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