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Energoprojekt is a takeover target
Posted on Monday, 19 June 2017 11:32
Napred Razvoj, a Serbian construction group owned by local entrepreneur Dobroslav Bojovic, will need to win over the government if it wants to succeed in taking over the country’s largest energy-to-water management project developer.

The suitor, acting in concert with four other minority shareholders, has already started sounding out a possible deal by tabling an informal offer for the remaining 64.7 per cent not already held in Energoprojekt.

It currently owns a 24.5 per cent stake, with Gradjevinsko Preduzece Napred, Montinvest Properties, Jopag, and Bojovic holding a combined 35.3 per cent of Serbia’s self-proclaimed largest contractor for complex projects.

While financial terms are not known, Energoprojekt had an unaffected market capitalisation of RSD 16.36 billion (USD 149.45 million), indicating the targeted majority stake had a value of roughly RSD 10.58 billion just before news of the approach sent shares down.

At this kind of price, the acquisition would be one of the largest of a Serbian company of the last five years, according to Zephyr, the M&A database published by Bureau van Dijk.

However, a deal may go under strict scrutiny, as SeeNews noted infrastructure minister Zorana Mihajlovic is looking into the potential hostile takeover in light of Energoprojekt’s importance within the construction and transport sectors.

The engineering business generated about 65.0 per cent of revenue in the first three months of 2017 from the international markets, and 35.0 per cent from domestic activities.

It was founded in 1951 in Belgrade, as a state-owned company to provide design and consultancy services within hydro and thermal power generation and water management.

Over the ensuing six decades it has developed projects ranging from district heating systems and transmission and cable lines to rural and urban electrification and river flood control in more than 70 countries worldwide.

Key markets by revenue, other than Serbia, include Russia, Kazakhstan, Belarus, Qatar and Oman, among others.

© Zephus Ltd