We have contacts and experience

Come with us to conquer Europe. Now is a good time to work on foreign transactions – you should do it without delay to get ahead of others. Why? Due diligence alone may take longer than the current crisis.

Let’s get involved in development on foreign markets

Your company’s entry into foreign markets is a breakthrough stage in the plan of building its power. A good and well-thought-out acquisition is a chance to speed up the development of your company by leaps and bounds.

Why now?

The market volatility caused by various crisis situations should not mean you are taking on a defensive strategy. After all, it is now the time for completely new fields of expansion to open up for you. A defensive attitude means that you may wait years for another chance or opportunity, and the costs of carrying it out may not go down to the current level.

Why with us?

We do not close ourselves in glass office buildings. We are open and proactive, which allows us to help managers – like you – to raise to a whole new level.

In foreign transactions we engage not only our knowledge and experience, but we also offer you to access our extensive network of contacts, allowing you to reach your chosen goals.

Thanks to our support, your talks with foreign partners will be much easier. Our presence will help you gain their trust quickly, which will give your company a much stronger position in negotiations.

Company

Meyra Group

The Fund is a partner supporting the development of the Meyra Group – the history of investments in the company.

We grew from PLN 30 million to over PLN 300 million thanks to a foreign acquisition carried out by Avallon MBO.

Piotr Baczyński

Managing Director of Meyra Group

In retrospect, how do you assess the moment of buyout of a global player, which had been operating on the German market for so many years, by a much smaller Polish company?

The founder of Medort, Dr. Tomasz Perner, used to say that there are many good companies in this industry in the world, but in fact only one is the best – and he meant Meyra. This planted in us the idea that that was the very business level we would like to strive for. And then, one day, we realized that the dream was becoming real. Avallon MBO also believed it and we persuaded the Fund to undertake this transaction. It was a journey into the unknown, but done with an experienced group of managers who know the industry well, including its global aspect.

Were you not afraid that it was too risky a decision?

While everything can be counted and analyzed from the business angle, a very important side to foreign transactions, and risk which is not measurable, is a cultural aspect and cultural differences. You have to get to know the mentality of people who you enter a transaction with and only by understanding it, you can implement appropriate solutions. Another thing which was new to us was the approach to cooperating with the German Trade Unions. You have to talk to them in a partner-like manner to be able to implement projects for which, according to the German law, their consent must be granted. We also had to reorganize the company. While analyzing the company’s processes, we came to realize that we were dealing with many overlapping competencies of employees, which often generated confusion and unnecessary conflicts between department leaders. Thus, a new company structure was created, which became one of the main factors behind our success.

Are managers from Poland successful in managing foreign companies?

They have nothing to be ashamed of. Their level of education does not differ from that in Western Europe or Scandinavia. The challenge, however, is that they are sometimes too ambitious and want to achieve their goals too quickly. Lack of understanding another business culture may lead to some sort of failure. These are often details – e.g. gestures we consider normal, and elsewhere may be offensive. However, I would like to reiterate that in terms of business, the content and enthusiasm for work, Polish managers do not differ in any way from their Western colleagues.

What would you advise managers considering going beyond the domestic market and significantly changing the scale of their companies’ operations?

This is a very good time to go abroad, despite the pandemic aspect. We can’t wait. Foreign acquisitions have many advantages. We minimize the risk because we increase a group of recipients, and Western markets are more mature and more stable than ours. If someone has a strong position on the domestic market, I definitely recommend a well-thought-out foreign investment. However, the financial background is very important here. You should have partners who have patience. This is what Avallon MBO proved to have. They entered the investment for a longer period than it would have been in the case of other funds. This is an extremely important added value.

Effects of the activities

Strategic change in the business model – from a distribution company to a production and distribution company.

Support in identifying, analyzing and evaluating the subjects of acquisitions.

Transfer of know-how and operational support in the area of acquisitions and integration of acquired entities.

Providing financing for the adopted growth strategy through acquisitions.

Optimization of the financing structure.

Recruitment of CFOs and support in recruiting top managers in the acquired companies.

Support in the implementation of the management accounting system and controlling system.

Introduction of corporate governance elements, transformation from the model of a “family business” to a corporate organization.

Now is the time for an overseas expansion and your company’s launch into ‘international waters’.

Michał Tokarski

Partner of Deloitte M&A Corporate Finance

Times of uncertainty are an opportunity for the best managers

Why is it worth looking for a financial partner with experience to jointly complete a foreign transaction?

Funds usually employ great specialists with experience not only in similar companies but also in completely different sectors. They know the specifics of foreign markets, even those on other continents, and it is precisely this kind of competence that they can share with managers. Importantly, in such cases, people who are well-motivated and committed to the company are taken on board because in the end both parties have the same goal – to liquidate shares and maximize profit on the invested capital – so that is why they walk along this path together.

It is a highly beneficial relationship for both parties. Of course, the fund watches the management board closely, but there is good reason behind it. Many people who manage business excellently do not have experience and knowledge, for example, in the area of M&A transactions. If we add to this a transaction in the foreign market, for many managers the whole undertaking may sometimes resemble rocket science.

One should remember that in the most developed, geographically close or even neighboring markets, a Polish company is still regarded as rather exotic. However, if there is a fund on board, it is much easier to gain their trust. In countries with a higher business culture, everyone knows what private equity funds are, thanks to which a company cooperating with such a fund is perceived as more credible.

What, apart from courage, does a manager who decides to enter new markets need?

First of all, you need multidimensional imagination and certainty about what you want to achieve. Equally important, if not more important, are one’s competences to carry out such a move. You can have your vision and courage, but at the same time you need a hard skillset. If we buy another company on the local market, it is easier for us because we know the market situation in the country pretty well and we move about in the familiar reality, typical of a given sector. As for foreign transactions, however, we do not usually have such detailed knowledge. It is not about just spending money. What is necessary is a long-term plan here – starting from mapping the sector, through in-depth knowledge of the specificity of the business in a given country, conducting the transaction itself, then integration and finally achieving success. It is a very complex and difficult process. We must have a good business plan, written for several years ahead, which needs to be based on real knowledge, not just guesswork.

Borders are closing, but perhaps new possibilities are opening up. Is 2021 a good time for foreign expansion?

I do not think that the year 2021 differs significantly in this respect from the second half of the last one. Many aspects of business have moved to the Internet and we already know that business can be done quite effectively online. This applies even to such large undertakings as the purchase of a company.

The experience of the crisis in 2008-2009 taught people operating in financial circles – those who worked in funds and corporations – not to make the mistake of stopping investments again. There is a lot of money on the market today, one of the reasons for which there are zero interest rates. This situation enables the M&A market to flourish.

In my opinion, there will be a lot of such transactions this year, maybe people will only be a bit more selective. Of course, it can be different in different sectors. Paradoxically, the values of many companies are higher today than before the crisis – this applies primarily to entities related to the technology sector.