In the coming five years there should be more than 200 million euros of new growth capital that will be seeking investments into the growing Baltic companies, according to Aare Tammem\u00e4e, the Senior Partner of Redgate Capital and the Chairman of the Board of FinanceEstonia.<\/p>\n
\u201eIt is difficult to talk about long-term trends in the small Baltic market, but the growth of transaction activity reflects the real growth of\u00a0 companies\u2019 economic activity and increased courage for dealing with risks,\u201c said Tammem\u00e4e regarding the transactions on the M&A market.<\/p>\n
This trend is expected to continue, and in 2014 and subsequent years new investors will come to the Baltic market, such as private equity funds that are initiated by the Baltic Innovation Fund program. \u201eIn the forthcoming years, there should be more than 200 million euros of new growth capital in the form of private and venture capital which will be seeking investments into the growing Baltic companies,\u201c said Tammem\u00e4e. \u201cAs there is still not enough public (stock exchanges) and private equity offerings, strategic buyers will still dominate in the transactions of purchase and sale.\u201d<\/p>\n
As a new trend, Tammem\u00e4e sees that the companies will be able to finance themselves more and more through various bonds, where investors are mainly wealthy private persons and local fund investors. \u201eIt will be fostered by low interest rates and growing savings. All in all, strategic buyers will dominate the M&A market, but there will be increased amount of capital offerings through private capital and bonds, which should be a good news to Estonian entrepreneurs,\u201c commented Tammem\u00e4e.<\/p>\n
He also added that in 2014 financial investors will continue exiting from portfolio investments (e.g. Askembla fund, Amber Trust) and the continuous investments (e.g. BaltCap) in the companies owned by funds will go on.<\/p>\n
\u201eIt will give a chance to local investors, including the management, to buy a way into the companies. Through the new private equity funds that are coming to the market (with the help of BIF), it will be possible to buy new businesses,\u201c mentioned Tammem\u00e4e.\u00a0 \u201eThe amount of commercial real estate transactions, where big centers or entire regions (e.g. EfTEN, Mainor \u00dclemiste) are being bought or developed, is continuously increasing. It will be an active year in the field of purchase and sales of companies.\u201c<\/p>\n
The amount of takeovers of the companies increased considerably in 2013 compared to 2012, and reached the level of 2011, where all three markets had a sharp increase. Last year there were 57 different transactions that amounted the total of 3.66 billion euros.<\/p>\n