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20. Years Global Securities in Turkey - Congrats, dear IEG JV partner

Ex-Apple CEO John Scully on Roadshow with IEG-Global Corporate Finance in Istanbul (From left to right: Guiseppe Clementi/Pivotac, Gökhan Özer/IEG-Global, John Sculley/Pivotac, Müjdat Altay/Probil Netas and Shane Maine/Pivotac)

Fishing for the next big M&A deal in Turkey

ISTANBUL (Reuters) - Turkey is providing rich opportunities for merger specialists trawling for the next big deal, as the country’s booming economy and improving corporate governance partially insulate it from a slowing global M&A market.

The latest prospect to surface involves Turkish hospital group Acibadem (ACIBD.IS: Quote,ProfileResearchStock Buzz), which notified the Istanbul Stock Exchange at the end of last week that it was in talks with various parties, including Malaysia’s state fund Khazana Nasional KHAZA.UL. Sources close to negotiations told Reuters that Integrated Healthcare, 70 percent owned by Khazana, had entered talks to buy Acibadem in a deal that could be worth $500 million.

Globally, mergers and acquisitions activity has been suffering; the euro zone debt crisis is dampening activity in countries to the west of Turkey, while political instability is complicating decisions in much of the Middle East and North Africa. ”As Turkey has managed to stand out positively in Europe and its region, it would be fair to say that some of the foreign investment looking at Eastern Europe and the Middle East has shifted and will shift to Turkey in the near future,” said Musfik Cantekinler, partner at consultancy Ernst & Young in Istanbul.

A strong recovery from the global financial crisis of 2008-2009 has persuaded many long-term investors to look at Turkey. Its economy grew 10.2 percent in the first half of this year; it will not escape the looming global slowdown, but the International Monetary Fund’s forecast of 2.5 percent growth for Turkey in 2012 is still well above the 1.1 percent which it predicts for the euro zone.

Turkey’s location as a land bridge between Europe and Asia is also attracting investors, even though its prospects of joining the European Union have faded for the time being because of disagreement over Turkey’s role in northern Cyprus and concern among some EU states about the admission of a largely Muslim country.

"Its geographic proximity to Eastern Europe, the Middle East and Asia positions Turkey as an ideal hub for the corporate world," Stefan Heilmann, Managing Director of German investment bank IEG, which earlier this year set up a corporate finance consultancy with Turkey’s Global Securities in Istanbul, called IEG-Global Corporate Finance Advisory.

VALUES

M&A deals with Turkish targets shot up to 218 deals worth $24.9 billion last year from 167 deals worth just $4.0 billion in 2009, when activity was hit by the last global economic slump, Thomson Reuters data shows.

Last year’s dollar value was lower than the record $30.6 billion hit in 2005, but the number of deals was much higher; there were 102 deals in 2005. So far this year, the value of deals has dropped back somewhat, to $8.4 billion, but the number has remained extremely high at 151.

Global private equity houses, including Blackstone (BX.N: QuoteProfileResearchStock Buzz), KKR (KKR.N: QuoteProfileResearchStock Buzz), TPG Capital and Advent International, are increasingly active in Turkey. "We consider Turkey "the China of Europe": strong growth prospects, young, large and well-educated population, entrepreneurial spirit, stable politics and reliable legal ownership titles," Heilmann said.

The most popular M&A sectors have been energy, power generation and finance. But the biggest splash so far this year was made by the world’s largest spirits company, Diageo (DGE.L: Quote,ProfileResearchStock Buzz), which agreed in February to buy Turkish raki and vodka distiller Mey Icki for $2.1 billion.

Ernst & Young estimates that of all M&A involving Turkish companies in the first half of 2011, nearly half involved inbound transactions by foreign investors, while purely domestic transactions accounted for nearly half. Outbound transactions — Turkish firms buying assets overseas — made up just 4 percent.

For foreign investors, Turkey’s corporate regulation has been a concern, but the planned introduction of the Turkish Commercial Code in July next year is expected to improve disclosure of companies’ financial performance, governance and ownership structures.

"The number of companies audited by independent auditors have increased significantly and Turkish family businesses are getting more familiar with international investors and M&A transactions," said Mehmet Sagiroglu, chief executive officer at IEG-Global Corporate Finance Advisory.

Despite a reputation for deep-rooted nationalism, Turkey has adopted liberal economic policies under Prime Minister Tayyip Erdogan’s AK Party government over the past decade. Sagiroglu said that apart from a 40 percent cap on foreign ownership in Turkish Airlines, there were no significant legal barriers for foreigners to acquire companies and participate in Privatization exercises in Turkey.

He predicted the government’s Privatization program would continue to stimulate foreign interest in Turkish assets. “Motorways and bridges will be privatized soon for a concession period of 25 years, and foreign investors will be among the bidders.”

By Birsen Altayli and Seda Sezer

IEG-Global Corporate Finance: Two leading financial advisory groups join local and international forces in Turkey

Global Menkul Degerler, Istanbul, has formalized its joint venture partnership with IEG – Investment Banking Group, Berlin (Germany). This Joint Venture will incorporate under IEG-Global Kursumal Finansman Danışmanlık (“IEG-Global”) in Istanbul. IEG-Global will provide financial advisory services to all companies, including small and medium scale enterprises, on merger & acquisition, equity & debt financing and privatization transactions. IEG-Global will benefit from the long- established local know-how and international presence of both partners.

Istanbul – One of the largest brokerage houses and the leading capital market institution of Turkey, Global Menkul Değerler has concluded an agreement for establishing a joint venture partnership with IEG – Investment Banking Group, one of the leading international investment banking advisory companies in Europe. The joint venture, which will be initiated with the signing ceremony, will provide three principal business units; namely, “Mergers & Acquisitions”, “Financings” and “Financial Strategy”; e.g. professional advisory services for merger, acquisition, debt financing, financial structuring and privatization transactions. The joint venture will focus on small and medium sized enterprises and aims to undertake an important mission in this area through the Growing Companies Market (GIP) stock market segment.

Joint venture of equal & complementary partners

The capital structure of IEG-Global will be a 50-50% joint ownership. Mehmet Sağıroğlu, who has successfully executed a variety of complex investment banking deals over the last 20 years, will be the General Manager. The leading position and expertise of Global Menkul Değerler in the Turkish capital market and the international presence of IEG – Investment Banking Group will create a powerful combination to capture the huge potential of the Turkish corporate finance market. In addition, IEG – Investment Banking Group will enhance know-how transfer to and support human resources for the joint venture in Turkey.

Local know-how, international reach

IEG has 10 offices throughout the world located in Asia, Africa, South America and Europe and will further explore growth opportunities in new international markets with Global Menkul Değerler. The joint venture targets countries with growth potential and plans to open branches at Asia, Gulf countries, South America and the western coast of USA. IEG-Global aims to become the No. 1 corporate finance house in Turkey.

Further focus on new and growth emerging growth markets

Gökhan Özer, General Manager at Global Menkul Değerler, has stated that they have created a multi-layer partnership by combining their 20 years of financial and investment banking experience with an international and effective power. Gökhan Özer said, “Our strength on the Turkish and experience in international markets of IEG – Investment Banking Group are offering a very strong partnership for the finance and investment world. Achieving a significant synergy, Global Menkul Değerler and IEG – Investment Banking Group will jointly develop and implement successful assignments on the Turkish corporate finance and Growing Companies Market and subsequently capture new emerging growth markets.”

Stefan Heilmann, Managing Director at IEG – Investment Banking Group, has emphasized that IEG – Investment Banking Group has an international experience with its 125 professional and his firm is the market leader for small- and medium- scale enterprises in Germany. “IEG-Global will maximize the activity of two complementary powers. As a result of the research we have performed in Turkey, we have decided that Global Menkul Değerler’s independent structure with its long- lasting experience on Turkish capital markets is the most desirable partner with the most promising synergies for us. I would like to emphasize that we are very pleased for expanding our reach, currently at 10 locations in the world, to a wider geography and for being in Turkey, one of the most important developing countries of the world.”

For detailed information: Zarakol İletişim Hizmetleri (Arife Gamlı) +90 (212) 217 29 99 or +90 (549) 748 22 22 

About Global Menkul Değerler A.Ş.:

Founded in 1990, Global Menkul Değerler A.Ş (www.global.com.tr) is one of the leading financial institutes of Turkey offering exchange brokerage, investment consultancy, corporate finance and fund management services to local and foreign investors. The Company receives its strength for realizing its assertive target “to provide high quality service and offer financial consultancy” to its individual or corporate, local and international customers from its affiliate Global Yatırım Holding A.Ş. and from the steady success of its award-winner research department.

The head office of the Company is located at Istanbul and it provides service with 5 branch offices and 5 liaison offices. Global Menkul Değerler also offers alternative quick access advantage to its investors through Investment Center 444 0 321 and www.global.com.tr.

About IEG-Investment Banking Group:

IEG-Investment Banking Group is an independent and international investment banking house with a focus on small and medium-sized transactions. IEG’s services include advisory on mergers & acquisitions, financing and financial strategy as well as the placement of equity, debt and hybrid capital. IEG is headquartered in Berlin with branches and associated offices in Amsterdam, Buenos Aires, Istanbul, Mumbai, Sao Paulo, Shanghai, Tunis, Warsaw and Zurich. IEG’s execution team is composed of 125 multi-disciplined staff in Berlin and across the international offices. IEG was founded in 1999 and is owned by its professionals. Please also refer to www.ieg-banking.com.

CEO, Co-Chairman Heilmann & Chairman Oze Press Conference Ritz Carlton Istanbul Press Conference Ritz Carlton Istanbul IEG-Global Signing Ceremony IEG-Global Signing Ceremony Handshake to Success

IEG-GLOBAL Joint Venture Signing Ceremony and Press Conference at the Ritz Carlton Istanbul on 1. March 2011

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