Dealmasters D.M. Ltd.

Our monthly newsletter dealing with acquisitions and investments in private companies

Issue: 1/2011




This is the first issue of our monthly newsletter, designed to bring to your mailbox a wealth of experience and news on acquisitions, project finance and in general, on anything to do with investments in private enterprises - both in our region and globally.


In every issue, you will find articles on the latest trends that impact the M&A market, analysis of technical issues and our corporate news.


We always appreciate your feedback, so please feel free to email us

to share your thoughts, reactions, opinions. Suggestions for specific topics that you would like to be covered are also welcome.


Featured Deal
Foreign investors seek to rent a 3/4 star Hotel, or Class A Hotel Apartment complex for up to 7 years, with an option to buy within the first 2 years of the rental period.  Their intention is to buy. The rental period is needed only to ensure they obtain an intimate knowledge of operations and financial performance, prior to committing a large amount.  Budget for the acquisition is up to EURO 50 Million, rent should not exceed 70% of current GOP, two years notice for termination. 

Interested Hotel owners or their authorized representatives may contact us in strict confidence at this email.       
Buying a Business during an economic downturn 
OR, The Benefits of Contrarian Investing

gold eggs


Investors' "herd instinct" is a well known phenomenon. In good times they all jump on the bandwagon and in bad times they bail out en masse.  This applies to all asset classes, including stocks, real estate and company acquisitions. Seasoned investors recognize that you do not make money by simply "going with the flow" unless you have the foresight (or luck) to bail out before the masses do. However, when it comes to illiquid investments in private enterprises, you can neither buy nor sell in a hurry. So, if you believe that the economy will be in better shape after THREE or even FIVE years, now is the time to make a move! Find those "golden eggs" with hidden value, buy, restructure, refinance, reposition, merge and hold on until the market turns. 


Apart from the above strategic reasoning, there are several other factors why it makes sense to buy now:

  • Lower prices: many business owners have reduced prices from 10% up to even 50%
  • Better terms:  many vendors are also willing to accept much more favourable terms such as earn-outs or deferred payments
  • Bank facilitation: Many Banks will be willing to offer you very, very attractive terms if you offer to reduce the debt of problem clients.
  • HR: Personnel easier to recruit and at lower salaries
  • Purchasing: Suppliers willing to offer discounts and easy payment terms especially if you run a creditworthy company
  • Promotion: Similarly, advertising and promotion will cost you less
  • Brand Awareness: In a slow market, anyone announcing a new company/new service will get much more attention than in an over-heated market.  There is simply much less "noise" plus everyone likes to hear something positive for a change!
  • Buy second hand: You can easily find used and very cheap office equipment, furniture, company vehicles   

Regardless of the specific sector you are targeting, the biggest opportunity now is in acquiring financially distressed but profitable companies with good growth prospects - i.e. profitable companies which for reasons that have nothing to do with the fundamentals of their business, find themselves owing too much money.


Dealmasters can help you formulate an acquisition strategy, identify suitable targets and represent you in the initial approaches while maintaining your anonymity.


Investment in Alternative Energy Projects
A wake-up call forced upon us
EAC Power Station 

As I am writing these lines, the attention of just about everybody in Cyprus is on energy - it usually takes a big jolt for most people to realize that even the most basic goods of technology and civilization cannot be taken for granted.


With the main power station in Cyprus out of action, we cannot help thinking how different the situation would be if we had a decentralized, distributed power system; simply put, instead of 2-3 large power stations burning oil, we could have many small power stations feeding into the grid or independently powering factories, agribusiness, hospitals or even whole communities. Such power plants could be based on renewable or alternative energy sources: wind, photovoltaic, solar thermal, waste-to-energy, biomass, co-generation, hydroelectric, wave, geothermal. Then, instead of relying on a single, polluting power station for 50% of the country's power needs (600MW) we would rely on one hundred, maybe more, power stations producing from just 100kW to 20MW. Impossible to knock out all stations at once, definitely more friendly to the environment and drastically reduced reliance on imported fossil fuels.


The regulatory framework is already mature for licensing Independent Power Producers (IPP), let's see if the private sector rises to the challenge.   The market is open, but any project needs to be licensed first by CERA  (Cyprus Energy Regulatory Authority) and then secure a license to connect to the grid by the Cyprus TSO  (Transmission System Operator).


Several Wind and Photovoltaic projects are already operational and there are more in the licensing stage. Biomass from slaughterhouse & butcher-shop refuse is picking up, with one very successful project already operational and more at the design stage. There is at least one major solar thermal project in the pipeline (50MW), while Authorities are considering waste-to-energy projects at several sewage treatment plants.


But the most promising sector (for me at least) is shallow geothermal, which is still at an early stage of development.   The beauty of geothermal technology is that it can be installed anywhere, at any stage of development and any scale - from individual houses to whole communities, new projects but also retrofit - and it works non-stop, all year round, regardless of weather conditions, with minimal maintenance. Shallow geothermal does not produce electricity but, when properly designed, helps reduce consumption by up to 70%. It works for both heating and cooling, but the major benefit for hot, Mediterranean countries is for cooling. Our problem is that, so far, we have been applying technology developed for North European countries, technology which obviously is more suited to heating rather than cooling. But new and more appropriate geothermal technology is coming soon.


Dealmasters is already collaborating with an international geothermal company, with extensive experience in hot climates and state-of-the-art technology, to facilitate their establishment in Cyprus and Southern Europe.


More on this, when we will have something specific to announce in the coming months. 


Dealmasters is an advisory firm providing investors and privately owned enterprises with Intermediary and Representation services in relation to acquisitions, fund-raising and private investments. For further details of the range of services we offer, you can download our corporate profile here.



Marios Argyris, for

Dealmasters D.M. Ltd. 

Featured Deal
Benefits of Contrarian Investing
Alternative Energy Investments

Quick Links



Who needs an M&A Advisor? 

Our core business is to offer advisory and intermediary services to either sell-side or buy-side clients.  


On theBuy-side, clients are usually sophisticated individuals, or corporate investors, well versed in acquisitions. Even so, they still engage us to assist in identifying acquisition targets and in closing a transaction. Foreign investors especially, recognize the need to retain professionals with expertise in the local market.


By contrast, on the Sell-side, there is usually a large knowledge gap. Most times, we are dealing with Shareholders and Executives who have never sold a company before and cannot appreciate the amount of work and level of expertise needed to attract investors and achieve a sale. It's a paradox that those who need our services most, are those who least understand and appreciate them.


We are, therefore, on a mission to educate our market and will cover the whole process of selling a company in a series of articles and features.



For starters and strictly for owners of small businesses we have a comprehensive guide on selling a business which may be downloaded here.