As stated in the CEE Expert Report 2021 published by FORDATA, the year 2021 was evaluated favorably by the international investment advisors from the region, who co-authored the publication.

The number of transactions grew throughout the year, reaching over 2000 deals by the fourth quarter of 2021, according to data collected in the report. Investment sentiment reflected much bigger stability year-over-year despite the still present market uncertainty, especially in brick and mortar businesses. 

As described in the report, COVID-19 caused a large proportion of deals to be put on hold in 2020 and revived the following year. The observed growing interest in TMT services, healthcare, and RES over that period are said to be still shaping the CEE market in the nearest quarters.

In total, the CEE region’s M&A amounted to 12,5% of all European deals. 

The report’s authors will hold a follow-up webinar on February 24th, where they will discuss the CEE M&A topics in more detail. If you are interested in joining the event, you can register for free on the FORDATA page.

FORDATA listed several trends observed in 2021 in the Central and Eastern European economies. These were the reduction of the capacity of lockdowns due to vaccinations; better potential for outbound deals; ESG compliance growing in importance in Due Diligence processes; a record investments and buy-outs volume by PE/VC funds; and e-commerce and remote operation booming. 

The situation in the CEE region precisely reflected global trends not only in terms of the economic factors influencing M&A activity but also its technical aspects, in particular the remote trust phenomenon, i.e. securing the "everything-from-anywhere" era, secure remote collaboration tools, or transferring more data to SaaS platforms - comments Piotr Miszczyk, Senior Business Development Specialist EMEA at FORDATA, cited in the report.

The analysis of investor’s traffic in FORDATA’s virtual data room system showed a large increase in the importance of this type of approach not only among entities from the M&A industry but also real estate, especially in the residential sector, added Miszczyk.

Compliance achieved through the digital

Similar to other regions of the EU, new regulations are underway that concern finance, data privacy, and ESG aspects, which are bound to influence the direction the CEE M&A markets and the economy, in general, are going, state the report’s authors. 

As a result of these enforcements, compliance issues will push companies further toward green and digital investments. 

The adoption of solutions such as virtual data rooms is one way of accomplishing the goal of compliance, especially by SMEs, comments FORDATA, as it addresses the requirements of GDPR and green transformation. It also benefits companies in terms of cost-efficiency and fulfills the growing expectations of cooperating businesses to be provided with an alternative, secure means of communication, especially in industries such as life science, auditing or commercial real estate, in case face-to-face meetings are limited. 

As the year 2020 tested businesses’ resilience against the pandemic differently, the degree to which companies have or at least considered adapting digital tools, was universally high - especially in the case of remote operation, says FORDATA.

Thus, not only the M&A market, legal offices, auditors or the governments are looking for solutions such as virtual data rooms, but also HR departments, R&D and compliance departments of companies of all sizes.

The use of VDRs will bring direct and indirect benefits to companies - says Piotr Miszczyk. As a no-paper, no-travel solution for secure sharing of confidential business data, it helps reduce costs and time of various processes, while its implementation automatically checks the green compliance box. 

The recent report and the report archive are available free here.

Media contact: Chris Pytel, chris.pytel@fordatagroup.com.

FORDATA is a virtual data room provider based in Poznań. The company offers a VDR solution in a SaaS model, which is used in M&A transactions, restructuring processes, audits and other enterprise projects to secure and facilitate confidential data sharing and communication.

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