Transcript BALKAN ADVISORY COMPANY

BAC
Company Presentation
September 2006
Contents
 Balkan
Advisory Company
Overview
 BAC Service Lines
 BAC References

Overview

Whether you are participating in a privatization tender, acquiring a private
company, starting a green-field project or joint venturing with a local company,
you have to structure and execute the most efficient, timely and highest value
strategy. Across the Balkans, Balkan Advisory Company consultants have
advised on more than 150 transactions in both sell-side and buy-side situations
across various industries and sectors.
Company Background
 Established in 1998 as the investment
banking arm of Europa Capital Management
(ECM), a leading CEEuropan asset
management house.
 Spun-off from ECM by the current principals
in October 2000
 BAC’s main office is located in Sofia. There
are three regional execution offices in
Belgrade, Bucharest and Skopje
 BAC has business development offices or
associates in Athens, London, Madrid and
Connecticut-U.S.A
Overview
Competitive Advantages
 Extensive accumulated investment banking experience in European
emerging markets
 Experienced staff recruited from Tier-1 consulting firms and
investment banks
 Combination of extensive Western expertise and local presence and
hands-on experience within South-Eastern Europe
 In-depth understanding and knowledge of Bulgarian accounting and
financial practices and how they relate to IAS/GAAP standards
 Excellent knowledge of local transaction conditions, procedures and
customs
 Local networking, contacts and relationships
 Local infrastructure, permanent presence and persistency
 Unmatched execution track record
 Customized and focused financial transaction-oriented advice to
Governments, multinationals, local corporates and international &
local portfolio investors
Service Lines

We provide services in three major service lines:
Privatisation
and M&A
 Deal screening
 Transaction structuring
 Preparation of investor
documentation
 Pre-bidding due diligence
 Company valuation
 Preparation of privatization
offers
 Liaison and negotiation
with relevant authorities
 Assistance in negotiations
with owners/managers of
the targets
 Support during closure of
privatization and M&A
transactions
Utilities and
Project Finance
Sectors:
 Electricity generation and
distribution
 Gas and oil pipeline
construction
 Airport construction and
concessions
 Road construction and
rehabilitation
 City water supply &
distribution
 Waste management
 Telecommunications
Services:
 Feasibility studies
 Financial structuring
 Research and potential
projects follow-up
Financial
Institutions &
Capital Markets
 Bank financial and
operational due diligence
and valuation
 New sovereign, municipal
and corporate debt & equity
issuance
 Sovereign and corporate
debt restructuring
 Debt-to-equity and debt-totax swaps
 Debt buy-back
 Fixed income strategies
 Fund management
 Exotics receivables
 Other - real estate
Privatization Advisory Services (sell-side)
BAC covers the full spectrum of sell-side advisory services for banks:
Phase I
Phase II
Preparation
Transaction
• General support and
project management
• Valuation
• Transaction planning and
strategy
• Due diligence
• Financial
• Legal
• Operational
• Preparation of teaser and
Information Memorandum
• Transaction documents
• Marketing strategy
• Investor Contact
• Tender Process
• Investor relations and
correspondence
• Market Analysis
• Data Room
• Review of legislation and
regulation
• Bid evaluation
• Sale plan
• PR and relations with local
and international media
Phase III
Completion
• Assistance in
negotiations
• Support in transaction
closing
Privatisation Advisory Services (buy-side)
BAC covers the full spectrum of buy-side advisory services for banks:
Services
General support and
project management
Purpose
Complete the project goals
when and as required
Activities
• Manage the acquisition
team including the Client's
dedicated personnel, legal
advisors and auditors
• Prepare all official
correspondence
• Arrange and schedule
visits to the Companies,
the Privatisation Agency
and other relevant bodies
and stakeholders
• Ensure positive media
coverage of the intentions
of the potential investor
• Provide local
administrative support
Due diligence
Valuation
Offer preparation
and
negotiations support
Provide key insights for
go/no go decision and for
future negotiations
Estimate range of values for
the target and for the
expected return
Assure successful bidding
and negotiations completion
• Verify main items of the
P&L Account, Balance
Sheet and Cash Flow
Statement
• Analyse all contingent
liabilities & commitments
and perform a full taxation
compliance review
• Summarise the key
operational results and the
status of the key assets of
the Companies
• Asses the impact of the
issues identified in the
legal and operational due
diligence on the company’s
future operations
• Develop a valuation model
to incorporate the major
risk areas identified during
the due diligence phase
• Estimate the Companies’
revenue generating
potential, capital
investment needs and
future cash flow levels
under different scenarios
• Identify high impact
negotiations factors
• Provide a range of values
and suggest an initial
bidding price for the
Companies
• Assist in the preparation
of the offer
• Analyse the decision
making process and
propose a relevant
communication strategy
for each decision maker
• Research the strategy, the
strengths and weaknesses
of other possible bidders
for the Companies using
all available legitimate
sources of information
• Support in closing
negotiations
• Post-acquisition advice
BAC References – Bulgaria
Client
Target
Services
Buy-side advisory services for Piraeus
Bank, Greece for the privatisation of
DSK Bank (2003)
Bank
Consolidation
Company
Sell-side services for the sale of
Express Bank to Societe Generale
(2000) (as a member of an
HSBC-lead consortium)
Private
Investors
Sell-side advisory services to private
shareholders of Hemus Mark for sale of
two minority stakes to Brevelie Urban
AG, Austria (1999 and 2004)
Tanweer Group
Sofia chain of
cinemas
Buy-side advisory services for Tanweer
Group, Greece for the privatisation of
Sofia city chain of cinemas (2001)
BAC References – Bulgaria
Client
Target
Services
Buy-side advisory services for Europa
Capital Management for the privatisation of:
 Orbitel – internet provider (1999)
 Pobeda biscuits factory (1999)
 KAI ceramic tiles company (1998)
 Damianitza winery (2000)
 Rodina paper packaging company (2000)
 Nikopol carton company (2000)
Europa Capital
Management
Buy-side advisory services for Interbrew,
Belgium for the privatisation of:
 Kamenitza Brewery (1994)
 Burgasko Pivo Brewery (1995) and for
the post-privatisation acquisition of
another two breweries:
 Plevensko Pivo (1999)
 Astika Brewery (1995)
beer
Beloizvorski
Cement
Buy-side advisory services for Holcim,
Switzerland for the privatisation of
Beloizvorski Cement (1997 and 2001)
BAC References – Bulgaria
Client
Target
Services
Buy-side advisory services for Norsk
Hydro, Norway for the privatisation of
Agropolychim - a leading fertiliser
production company (1997)
oil & energy, petrochemicals
food processing
mining and smelting
Hlebna Maya AD,
Rousse
MDK Pirdop
copper smelter
Drujba Glass factory
glassworks
Buy-side advisory services for Puratos,
Belgium for the post-privatisation
acquisition of Hlebna Maya yeast factory,
Rousse (2000)
Buy-side advisory services for Phelps
Dodge, USA and Glencore, Switzerland
for the privatisation of MDK Pirdop
copper smelter (1997)
Buy-side advisory services for Yioula
Glass, Greece for the privatisation of
Drujba packaging glass factory (1998)
BAC References – Bulgaria
Client
Buyer
Services
Privatisation
Agency of
Bulgaria
Sell-side advisory services for the privatisation
of one of the leading Bulgarian confectioneries
– Svoge to Jacobs Suchard (1993)
Privatisation
Agency of
Bulgaria
Sell-side advisory services for the privatisation
of SZI Sofia confectionery to Nestle (1994)
Privatisation
Agency of
Bulgaria
Sell-side advisory services for the privatisation
of Antibiotic Razgrad - a leading producer of
generic pharmaceuticals, sold to an investment
consortium led by Deutsche Bank (1997)
Deutsche Bank
Privatisation
Agency of
Bulgaria
International and
local investors
Sell-side advisory services for the privatisation
of a pool of 7 large hotels and sea-side holiday
villages sold to international and local investors
(1998)
Privatisation
Agency of
Bulgaria
International and
local investors
Sell-side advisory services for the privatisation
of 13 companies for food processing and
agriculture to international and local investors
(1996-1998)
Mass Privatisation Programme design and
Enterprise selection criteria development for the
Council of Ministers of Bulgaria (1996-1997)
BAC References – Serbia
Client
Target
Services
Exclusive sell-side transaction advisory
services for the privatisation of „Duvanska
Industrija Senta” Shareholding Company
Lead transaction advisory to OTP bank on
privatization of Jubanka. Responsibilities
include assistance in valuation, due
diligence, market research, bidding and
negotiation strategy and support.
Exclusive sell-side transaction advisory
services for the privatisation of Serbia’s
oldest and largest tourism and hospitality
company – Putnik and the largest hotel
group in Nis – Srbija Turist (2003)
Pharmaceutica
ls
Joint buy-side transaction advisory
services contract for the acquisition of one
of two pharmaceutical companies Zdravlje, Leskovac and Zorka Pharma,
Sabac, completed with the successful
acquisition of Zdravlje, Leskovac (2002)
BAC References - Serbia
Client
Perfumery and Cosmetics
Target
Services
Joint buy-side transaction advisory
mandate for the acquisition of a
Serbian cosmetics company
Assisted Citadel in originating and
securing the contract with Lukoil for
buy-side advisory for the
privatisation of Beopetrol (2003)
Financial Due diligence of Jelen Do,
Jelen Do, a construction materials
company (2003)
Financial Due diligence of Polet,
Novi Becej, a construction ceramics
company (2003)
BAC References - FRY of Macedonia
Client
Target
Sugar Factory
4 November,
Bitola
Potential investors
Porcelanka, Veles
Services
Post-privatisation financial and
operational Due diligence of 4th November
sugar Factory, Bitola (2003)
Investor search and preparation of
investor’s documentation (teaser,
information memorandum) (2002)
Financial restructuring of a major
Macedonian ceramic tiles and tableware
company and sell-side advisory services
for the privatisation Agency of FYR of
Macedonia (2000)
Business valuation of Balkanska Banka,
Skopie (2000)
Usje Cement
cement
Buy-side advisory services for Holcim for
the privatisation of Usje Cement factory
(1998)
BAC – International Press Coverage
In May 2004, BAC was a joint lead manager on the 30 million Euro
corporate bond of the Bulgarian State Railways. The well-structured
transaction was in the prestigious Euroweek (first page) and in IFR.
BAC Team – Previous Experience
BAC consultants have worked for first-class employers in
consulting, investment banking and other institutions*...
Consulting and Auditing
Investment Banking
* Incorporates only the experience of the current BAC consultants
Other
BAC Team – International Exposure
...have worked and lived in countries across Europe and
North America*...
Belgium
Netherlands
Germany
Canada
Ukraine
U.S.A
Romania
Bulgaria
United Kingdom
Spain
Greece
Serbia
Macedonia
* Incorporates only the experience of the current BAC consultants
BAC Staff - Educational Background
... and have studied and obtained advanced degrees and
professional accreditation from North American and European
business schools and associations
North
Americ
a
Europe
BAC Senior Management
Name and
Position in the
Firm
Vladimir
Karolev, MBA
Managing Partner
Area of Expertise
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Alexander
Bebov, MBA
Managing Partner
Svetoslav Dimov
Associate Director
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Marija Jevtic
Associate Director
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Previous Employers
Privatization advisory
M&A, divestitures
Due Diligence
Project management
Negotiations
Private Equity
Transaction
Structuring
Corporate Finance

Capital markets
research, origination &
sales
Financial due diligence
Project management
IPO’s
Deal origination
Privatization advisory
M&A, divestitures
Due diligence,
Valuation
Asset work-outs and
restructuring
Privatization advisory
Due diligence
Project management
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KPMG Barents
Group USA LLC
Europa Capital
Management a.s.
ECM-Bulgarian Post
Privatization Fund
Education
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Salomon Smith
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Barney
J.P.Morgan
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Prudential Securities
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KPMG Bulgaria,
Financial Advisory
Services
Barents Group
Europe
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Deloitte & Touche,
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Belgrade
Economics Institute, 
MBA, University of Alberta,
Edmonton, Canada
Ph.D. (ABD) in Industrial
Economics, Technical University,
Sofia
Diploma in International
Economics, University of National
and World Economy
Passed level 1 of CFA program
(AIMR)
Harvard University, Master of
Public Administration Program
MBA Stern School Of Business,
New York University
(Finance/Marketing)
BA, University of Maine, USA
Diploma in Business
AdministrationScuola Superiore Enrico Matei,
Milan
MSc Economics – Institute of
Economics, Sofia
University of Belgrade, School of
Economics, M.A. Candidate
University of Maryland, B.A.
Contact Info
Balkan Advisory Company
Sofia Office
87 Stamboljiski Blvd., 1st Floor
1303 Sofia, Bulgaria
Tel: (+359 2) 981 2724; 980 3954
Fax: (+359 2) 981 7200
GSM: (+359 889) 626 741
E-mail: [email protected]
E-mail: [email protected]
Belgrade Office
Terazije 27/I,
11000 Belgrade, Serbia and Montenegro
Tel/Fax: (+381 11) 324 6913, 324 6900
GSM:
(+381) 63 395 213
E-mail: [email protected]
For further information you may also visit our website: www.bac.bg