ROMANIA Trends and Developments Contributed by: Ileana Glodeanu and Delia Dumitrescu, Wolf Theiss
• secondary buyouts, by selling companies to other PE funds when portfolio firms reach maturity but are not yet ready for IPOs or trade sales; and • IPOs, although these are still used less often than other exit structures (notably, while the Bucharest Stock Exchange offers some liquidity, many firms consider listings on larger European markets for greater valuation and investor reach). Historically, Romanian PE has delivered attractive returns, benefitting from growth potential and value creation initiatives. However, there are challenges likely to dampen short-term exit multiples, such as: • inflation and rising interest rates, which increase financing costs and reduce consumer purchasing power, undermining company profitability and deal valuations; • geopolitical uncertainty, due to the ongoing Ukraine conflict, and regional instability, which weigh on investor sentiment and sector-specific risk, especially for export-oriented businesses; • valuation gaps due to sellers often expecting pre- crisis valuations; and • heightened regulatory scrutiny of M&A transac - tions. Romania’s PE market is closely linked to the broader CEE region, where several trends are influencing the PE landscape. • CEE economies are generally growing faster than Western European economies, driven by factors such as lower labour costs, a skilled workforce and ongoing economic reforms. This “catch-up growth” is creating attractive investment opportunities for PE funds. • CEE countries are benefitting from significant inflows of EU funds, which are being used to improve infrastructure, support economic devel - opment and promote innovation. These funds are creating opportunities for PE funds to invest in projects that are aligned with EU priorities. • The middle class in the CEE is growing rapidly, leading to increased consumer spending and demand for goods and services. This is creating opportunities for PE funds to invest in consumer-
facing businesses such as retail, hospitality and leisure. • There is a trend towards regional consolidation in several sectors, as companies seek to expand their market share and improve their competitiveness. Future Outlook: PE in 2026 and Beyond Moving into 2026 and beyond, several trends and developments are expected to shape the direction of PE investments in Romania, presenting both oppor - Valuation expectations continue to be a barrier in some cases, with company owners prepared to wait for valuations to increase. This can lead to longer deal timelines or postponed transactions. However, as market conditions improve and the valuation gap narrows, deal execution is expected to become easier. Succession planning and SME consolidation Succession planning remains a key driver of deal activity, particularly in the region’s vast SME land - scape. Many family-owned businesses are reaching a stage where founders are looking to exit, creating opportunities for PE funds to step in, professionalise operations and drive consolidation. The rise of strategic buyers In recent years, strategic buyers have increasingly outpaced PE firms in deal-making activity, particu - larly in mid-sized transactions. Strategic buyers often have the advantage of being able to move quickly and provide greater certainty of execution, which appeals to sellers seeking a swift and reliable transaction pro - cess. However, PE funds remain active, particularly in sectors where they can add value through operational improvements. Technology and digital transformation Technology, energy, healthcare and consumer goods sectors are expected to remain attractive for M&A transactions. According to the Romanian Associa - tion of Software and Services Companies ( Asociația Națională a Industriei de Software și Servicii din România ANIS), the IT sector’s annual revenue has grown at an average rate of over 15% in recent years, reaching nearly EUR6 billion in 2024. As businesses in tunities and challenges. Valuation expectations
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