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Deal 5: Omnia Chief Evangelist Matei Ladea on Dumagas Acquisition from Bancroft

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On March 3, CEE Legal Matters reported that BPV Grigorescu Stefanica has advised Omnia Capital on its acquisition of Dumagas from Bancroft. CEE In-House Matters spoke with Matei Ladea, Chief Evangelist at Omnia, to learn more about the acquisition.

CEEIHM: To start, tell us about Omnia Capital.

Ladea: Together with Bogdan Georgescu, Omnia Capital was founded as a Romanian Private Equity investment company specializing in Growth Equity and Buy-Outs, operating by attracting investments on a deal-by-deal basis, creating opportunities for entrepreneurial businesses to grow, while also offering them a full-fledged advisory service. We have also done some VC deals (123credit, OrgXO).

Our team has varied experience in the advisory environment and in business management and growth. We all have our own entrepreneurial backgrounds and are proud to say that our expertise goes beyond fundraising and managing investments, we are both able and keen to get involved in the business and to actively participate in its growth and development.

CEEIHM: What was it about the target - Dumagas - that you found particularly appealing?

Ladea: The Dumagas acquisition is part of Omnia Capital’s commitment to investing in industries that are strategic and fundamental to the economy, but operate in “unsexy” business sectors. The Romanian M&A market has grown tremendously over the past 10 years, but most deals are closed in acknowledged sectors like real estate, pharmaceuticals, retail, or in trendy industries like IT&C, crypto, healthcare, or services.

We have high regard for transport; no economy can survive without the movement of goods and services. We aim to further invest in this sector via acquisitions, and Dumagas is the perfect target to start with. They are a well-established company (26 years of experience), they have a strong revenue flow (average of EUR 35 million over the last 15 years) and a great, independent management team, with a 16 years average company seniority. Coming by a company that has such a dedicated staff and a great culture is a rarity.

Moreover, over 80% of revenue is generated by more than 20 top-rated international customers, which have been working with us for over 10 years. All in all, we believe Dumagas is the definition of a strong, steady company.

CEEIHM: What can we expect next, post-acquisition?

Ladea: The cornerstone of our investment philosophy is a mix of activism and building up targets “together with management." During this acquisition, the management team of Dumagas Transport SA was invited to participate in the implementation of Omnia Capital’s strategy, which they gladly accepted. Following this, Claudiu Corendea, Business Unit Manager and a valued team member since 2007, was promoted to CEO.

Our investment thesis focuses on the commercial growth of portfolio companies. The short- and medium-term attention will be directed to our customers, who we wish to continue serving at perpetually improving operational standards, in commercially sustainable conditions, that will provide for the future development of our company.

This strategic acquisition marks two years of invested effort of seeing over 1300 transport companies (900 in Romania and 400 in the UK) for the establishment of a Trans-European platform. We aim at building around Dumagas a group of transporters with different specializations, reaching an aggregated revenue north of EUR 100 million. Such a group will be able to service the most demanding customers, will benefit from economies of scale, will use tens of years of aggregated know-how, and will surely drive another level of performance.

CEEIHM: What would you say was the most complex aspect of the deal?

Ladea: The deal timeline and corresponding deadlines were unrealistically short for the dimension of the target, the fact that this was a competitive transaction, and the profile of the seller - Bancroft is an institutional investment fund with over 30 years of experience.

The official process between the principals unfolded between November 7 (the first meeting) and January 16 (the SPA signing). During these two months that spread across the winter holidays, we worked relentlessly, completed the due diligence, negotiated the commercial conditions, and drafted, negotiated, and signed the SPA. All teams worked collaboratively during Christmas and New Year's and for this, I’d like to thank our friends at BPV Grigorescu Stefanica for their implication, dedication, and professionalism. Their enthusiasm and energy transformed an impossible timeline into a success story.

CEEIHM:  And why did you pick BPV Grigorescu Stefanica as your legal advisor on it?

Ladea: This was not our first dealing with them, so we decided based on previous experiences and their ability to handle an impossible timeline in a specialized industry. I have a legal background which helps because it both facilitates the understanding of the institutions and their importance (so we don’t waste time negotiating details), and we are able to evaluate the quality of the work offered to us by the counselors we work with.

M&A lawyers have a huge influence on transactions, influencing both the structure and terms. Choosing someone who understands both the deal dimensions and the legal implications is essential since the wrong choice can cost you an otherwise great deal. We had the opportunity to also work with Western European lawyers, and I am happy to conclude the value of our Romanian attorneys, genuine deal-makers like BPV Grigorescu Stefanica, a spring of “market standard” practices.

Originally reported by CEE In-House Matters.

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