In this Kyiv Post interview, Boris Krasnyansky, managing partner in Ukraine for PwC, said that Ukraine’s M&A market is on course to exceeding pre-crisis levels within two-three years.
Kyiv Post: Do you see the Ukrainian M&A market recovering to pre-crisis levels? If so, when and what sectors will be most attractive?
Boris Krasnyansky: Yes, I expect it not only to recover, but significantly exceed the pre-crisis level in two-three years. The most attractive sectors most likely will be agriculture, oil and gas, utilities, services.
KP: If European banks were big buyers of Ukrainian assets before the crisis, who are the main buyers on the market today, who will be buying in coming years and what countries are they from?
BK: Today, Ukrainian companies are the main buyers in the market. In the coming three to five years I expect a significant proportion of investment to come from Ukraine, Russia, Middle East countries, China.
KP: For the selling side, is now an optimal time for a Ukrainian business owner to sell? Or would it be best to wait a year or two?
BK: No, it is not optimal time. It would be better to wait two or three years.
KP: For the buying side, is now an optimal time to for a foreign investors to buy an asset in Ukraine, or would it be best to wait a year or two?
BK: An optimal time to buy is when the price is the lowest possible. However, usually investors start buying in a fast growing market, when the price they have to pay is also growing. Therefore, it is the optimal time now to buy in Ukraine. However, investors will be waiting in the short to medium term.
KP: Could you identify the top five strategies and hands on changes domestic business owners should start adopting today to ensure they can maximize the sale price of their assets to an investor in the future?
BK: A practical answer to this question can only be sector and company specific. However, clearly there are standard drivers of the sale price, for example, profitability, strong cash flow forecast, long term contracts with the customers, clear structure of the company and clear ownership structure, compliance with corporate governance standards, proven track record of improved financial results, etc.
KP: What are the top five risks investors face when buying assets in Ukraine and what strategies and measures can they adopt to main ensure that they get a fair price for assets bought in Ukraine while minimizing risks of potential problems related to the assets?
BK: Everybody talks about risks… Strategies and measures: The best thing the investors can do is to work with professional service providers who understand market conditions in Ukraine.
