The Ukrainian market for mergers and acquisitions (M&A), which until recently experienced a shortage of buyers, has been growing for the third year in a row, Serhiy Budkin, the Managing Partner of FinPoint Investment Advisers, has said.
Commenting on the situation on the market within the framework of the Kyiv International Economic Forum, the expert predicted several large transactions in the next 12 months, including in the financial sector, IT and development.
The founder of UFuture Holding, Vasyl Khmelnytsky, at the forum estimated the average multiplier when evaluating Ukrainian companies at about 6. In particular, speaking of the annual sales of his company at $70 million, he estimated its value at about $420 million, although in Europe it could cost $700 million.
Khmelnytsky told Interfax-Ukraine that the multiplier for Ukrainian companies may vary depending on the industry, for example, in medicine – 8, while in manufacturing – 5.
At the same time, the entrepreneur noted that some foreign buyers still expect a lower price and a high return on investment from Ukrainian investments – in 4 years, while the multiplier 6 is about 15% per annum.
Budkin generally agreed with this assessment of the multiplier for Ukrainian companies.
“The multiples have a tendency to increase. The revival [of the M&A market] leads to an increase in the multiplier in itself,” he said.
U.S.-based Trident Acquisitions Corp. has been recognized the winner of the tender for the development of the Dolphin hydrocarbon section on the Black Sea shelf on the basis of a production sharing agreement (PSA), company CEO and one of its shareholders Ilya Ponomarev has said. “It was a difficult struggle, but our application was significantly more profitable for Ukraine,” he said on Facebook.
Ex-State Duma deputy Ponomarev, to whom Petro Poroshenko granted Ukrainian citizenship in May of this year, thanked the government and personally Minister of Energy and Coal Industry Ihor Nasalyk for the trust. “We promise not to let you down and to do everything possible to start production as soon as possible!” he said.
As reported, on April 12, 2019, the Cabinet of Ministers announced a tender for the development of hydrocarbons within the Dolphin section on the Black Sea shelf under PSA terms. The term of the agreement is 50 years.
U.S. Trident Acquisitions Corp., which submitted one of the four bids in a tender to develop the Dolphin section on the Black Sea shelf under a product sharing agreement (PSA), has said that the company is ready to invest $1 billion. “We proposed investment in the amount of $1 billion to Ukraine, the start of production in three and a half years if the reserves are discovered and the most experienced offshore fields development team,” Trident Acquisitions CEO, former Deputy of the State Duma of Russia Ilya Ponomarev, who became the Ukrainian citizen under a decree of Petro Poroshenko in May, wrote on his Facebook page.
“We see what rivals would say, we are keeping our fingers crossed and looking forward for [the results],” he said.
As reported, the Cabinet of Ministers of Ukraine on April 12 announced a tender to develop the Dolphin Black Sea shelf section under the PSA. The term of the PSA is 50 years. The winner of the tender must provide a geological survey of the subsoil at the site, including the drilling of at least five wells during the first stage (five years) of geological exploration. The minimum investment that must be made in this period will be determined by the results of the tender, but must be at least UAH 1.5 billion.
The initiative to develop the Dolphin section belonged to another U.S. company, Frontera Resources Corporation, which also applied its bid for the tender.
Two other participants are Caspian Drilling International Ltd, a state-owned oil company of the Republic of Azerbaijan (SOCAR), and Ukrnaftoburinnia, one of the largest private gas producing companies in Ukraine.
