Turkish law firm Kolcuoglu Demirkan Kocakli acted in more than 15 M&A transactions in 2014, of which not all are closed yet, and predicts a sustained level of activity in 2015, its managing partner has told EMIS.
“We do a lot of work with European and American clients and recently also with Japanese and Chinese clients, predominantly on the buy-side and are currently working on 14 buyout M&A transactions,” Umut Kolcuoglu said in an interview, highlighting foreign investors' long-term confidence in the growth potential of Turkish assets.
Looking ahead to 2015 and commenting on the general macroeconomic outlook in Turkey, Kolcuoglu stressed that despite the recent political and economic turmoil, which has negatively impacted private sector investments, the number of M&A transactions signed by the firm has remained resilient so far year-on-year.
“Given the persistent private equity activity as well as foreign and Turkish investors' appetite in a wide range of industries, we are looking to close around 15 M&A transactions by year-end. Certainly, the general election results will be a key factor for M&A activity in the second half of this year. Depending on the political landscape, we might see significant fluctuations in market activity”, he said.
Kolcuoglu pointed out that the retail business, ports as well as insurance and brokerage are some of the attractive sectors in Turkey and he expects more deals to come.
“We have seen a lot of M&A activity in the insurance sector. Due to the relatively low penetration rates in comparison with more mature markets, Turkish insurance companies are still attractive for foreign investors. We are working with one of the bidders in the privatisation of Turkish insurance business Halk Sigorta. Both its life and non-life units are on the market,” he said.
Kolcuoglu noted that Halk Sigorta has already received considerable interest from international investors who want to take part in the deal and acquire its life and/or non-life units.
The law firm is also working on joint venture deals, private equity deals and strategic transactions in various sectors. It recently completed the signing of a strategic buy-out transaction on the buy-side where Bunzl, a major London-based international distribution and outsourcing group, has agreed to acquire İstanbul Ticaret Hirdavat Sanayi AS and its related company İstanbul Ticaret Is Guvenligi ve Endustriyel Urunler Sanayi. The firm also recently closed a deal where private equity fund Mediterra Capital Partners acquired Soke Un, one of the leading flour producers in Turkey.
Meanwhile, Kolcuoglu noted that on the back of sluggish GDP growth rates in Western Europe, Turkish companies are increasingly turning towards African markets for better returns.
“We are currently advising two Turkish companies in the construction and operation of a logistics centre in the African region,” he said, adding that the Balkans and South Eastern Europe are other preferred geographies for Turkish investors.
“Turkish investors are becoming more active outside Turkey, particularly in the region surrounding Turkey. We see deals in manufacturing, tourism, infrastructure and construction. We believe that Turkish companies have both the financial and operational capacity to expand outside Turkey,” he said.
The law firm is currently working on four sell-side transactions in fleet management, advisory, retail and supplementary nutrition products services.
Founded in 2007, the law firm counts 3 partners and 38 associate lawyers.
According to a Deloitte report, M&A activity in Turkey in 2014 reached a total deal value of around USD 21bn through 236 deals. Privatisations and middle market deals were the two drivers of overall deal volume. Foreign investors and private equity firms remained highly interested but cautious.