DealMasters - Regional Expertise, Global Transactions

Our newsletter dealing with acquisitions, mergers and direct investments

Issue: 1/2015

APRIL 2015

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. 

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M&A "War Stories"

Our series of M&A War Stories is based on real-life experiences of interest to colleagues, investors and entrepreneurs.


Anthropologists tells us that we were hunters/gatherers during the first 90% of human history; domestication of animals and agriculture came much later, "only" 12.000 years ago. During that long hunter/gatherer stage, we used to gather around the fire at night and share experiences. Stories of courage and danger, mishaps and luck, achievements and failures: War Stories. So, when we share experiences by the coffee-machine, or over a round of drinks, we are actually carrying on a tradition which is as long as the history of humankind.


Our first article, titled "Buffet or a la Carte?" deals with a common Buy-Side mistake.


Download our first "War Story" here.



A Sampler of our direct mandates*


The Early Bird gets the Worm..




Acquisition of ambient temperature foodstuff or other consumer durables Import/ distribution/ wholesale business in Cyprus, with established clientele in HORECA sector - up to €2 Mil


Acquisition from 51% to 100% of frozen foodstuff (meat, fish, pasta) Import /Distribution / Wholesale business - up to €10 Mil


Acquisition of Luxury Boutique Hotel in Cyprus, 40 to 80 rooms, any location - up to €15 Mil


Acquisition of small Retail business, any sector, any location in Cyprus, with good track record and profitability (not in food & beverage or hospitality sector)


Acquisition from 51% to 100% of licensed Photovoltaic projects with approved PPA (not open market projects) - investment up to €1,5Mil per MW turnkey, depending of feed-in-tariff.


Income Properties, for sale or sale/leaseback with high occupancy levels and gross yield at least 6% - up to €10Mil


Acquisition of Accounting/Audit services companies in Cyprus with established clientele, any size - paying up to X1,1 annual fee revenue, depending on quality of revenues. Existing qualified personnel can stay on in a salaried position to pursue career within a large Accounting/Audit firm.




Outright sale of Children entertainment/play-centre in Cyprus, custom-designed and built to international standards, good trading history and excellent potential for organic growth or franchising in Cyprus or abroad - €650K


Early-stage tech investment in Loyalty App start-up with international scope; large minority offered (negotiable) for investment of €300K.  Exit Valuation projected at €50 Mil.


Outright sale, or growth-capital, for IT company specializing in complete Bank software solutions, with global clientele (small Banks, micro-finance institutions, credit unions) - €1Mil


Outright sale, or staged transfer under revenue-sharing arrangements, of Fiduciary/ corporate administration services business in Cyprus, with established international clientele - Price negotiable depending on handover arrangements.


Sale of 50% equity stake in recently renovated, large hotel-apartment complex in Cyprus, high occupancy levels due to collaboration with major foreign tour operator - €10Mil investment with minimum ROE 5% and substantial asset backing.


Outright sale of fully equipped bakery/confectionery production facilities in Cyprus, with all licenses and highly experienced personnel - €2,2 Mil including freehold property.


Franchise of international cafeteria brand, franchisee is market leader in East European country operating 16 cafeterias including three within international airports, well established and profitable. Country franchise offered for outright sale.


* Direct mandates are written engagements between us and the client, no other intermediaries involved


In addition to Direct Mandates we source deals via our international network of M&A Associates in the UK, France, Belgium, Germany, Spain, Greece, Israel, Russia and the USA. 




Cyprus Rising from the Ashes/ Part IV


It is not necessary to change. Survival is not mandatory.

W. Edwards Deming


It's nice to be able to say "I told you so", but Cyprus is adapting and changing. A slow but steady recovery is in progress, even if Cypriots justifiably complain bitterly about the economy, lack of liquidity and unemployment. But let's not forget that, only two years ago, Cyprus was literally on the brink of the abyss.


Back in the June 2013 Newsletter, just after the unprecedented robbery of peoples' savings (the infamous "haircut") we wrote: "... Cyprus has a small, resilient and highly adaptable economy which can recover much faster than bigger economies ...."


 Soon after, in the October 2013 Newsletter we wrote: "... the prophets of doom predicted back in March that Cyprus would soon leave the eurozone, go bankrupt and (figuratively) sink and disappear into the Mediterranean...." however, "... The consensus is that the economy will bottom out between 2014 to early 2015 and start a steady recovery thereafter. This provides a time-frame for opportunistic, but patient investors..."


And in November 2014: "Cyprus has stuck to its commitments towards the Troika (IMF/ECB/EC) ensuring the timely disbursement of bail-out funds. But there are several other developments which justify optimism... "


From the Ashes

Latest developments:

Standard & Poor revised Cyprus' outlook to positive (B+/B Rating) while yields on Cyprus sovereign bonds fell below 5%. The last of capital controls, imposed by the Central Bank back in 2013, have been lifted. Banks have been re-capitalized and are now capable of writing off NPL's.


Finally, new legislation was passed by the Cyprus Parliament on Bank foreclosures and insolvency. Procedures are still too complicated, but this legislation is a marked improvement and it will finally enable a re-pricing of real estate assets and the opening up of the property market - a crucial market in which everyone has, so far, been sitting on the fence.


Much more needs to be done, such as the privatization of Government-controlled organizations, liberalization of the Energy market, re-structuring of the public sector. But the foundations have been laid.




Private Sector Initiatives


"Συν Αθηνα και χείρα κίνει" (Gods help those who help themselves)

Ancient Greek proverb, attributed to Aesop


While the public sector is pushing ahead with reforms, we have not witnessed any major structural changes in the private sector. A few examples:


Local M&A

While acquisitions by foreign investors are on the rise, merger activity among local firms is anaemic. Local M&A is not a matter of choice, but a matter of survival. A relevant article on M&A dating back to 2012 (!) but still relevant, can be downloaded here. Consolidation is a must not only in trade & industry, but also in the vital corporate administration sector, which is facing increased pressures from ever-tighter regulation and "de-offshorization".


Quasi-Banking & Credit:

Nobody has stepped in to fill the credit gap left by the Banks. In our October 2013 Newsletter we outlined some Quasi-Banking and Lending Opportunities suitable for foreign firms already active in Trade Finance, non-Bank credit and Insurance. Liquidity is the new Money!


Private Equity

Nobody has yet to seize the opportunity to fill the equity gap in the private sector, a chronic problem even in better times. Since the Cyprus market is "below-radar" for most international Private Equity investors, we need home-grown Private Equity Funds


From our experience with first-time Fund sponsors/founders, there is a huge knowledge gap on what Private Equity is and how a Fund should operate. In most cases, Fund founders seem to think that all it takes is to choose a suitable structure and have their fund approved and licensed. This is like putting the cart before the horse. Form should follow function and not vice versa.


We have developed several Private Equity investment strategies suitable for Cyprus and are open to discuss them with suitably qualified Fund sponsors/founders.




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





Marios Argyris, for

Dealmasters D.M. Ltd. 


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M&A War Stories
Sampler of mandates
Rising from the Ashes
Private Sector Initiatives