International Opportunities: Add-on’s in Attractive Markets at Attractive Valuations

‘Why We Especially Love Poland’

Right now, Central Europe, and Poland in particular, offer unique investment opportunities. There is much less competition for deals: Volume of M&A deals in Central Europe relative to GDP is 4x lower than in Germany and France (about 8x lower than in the US). Yet, the number of mid-market companies is comparable to the UK and France. Result: Investors see attractive acquisition multiples.

At the same time, Central Europe is an especially a great place to invest given the growth of its economies and quality of human capital. Cumulative growth of GDP in Poland between 2010 and 2019 was 3x higher than the average of the Euro area and almost 2x higher than growth in the US. Tide is rising all the boats. In addition, the labor pool is highly skilled and attractively priced. Polish students perform in PISA tests at levels higher than their peers from other large European countries or their peers in the US for that matter. Poland graduates every year more engineers than the UK and about 1/3 of the US number. Add to this the fact that average monthly wages are below $1,800 a month and that pretty much explains the growth of the economies.

We have been investing and working in Central Europe over the years and we know the place. It continues to be a uniquely attractive investment space. Definitely worth the effort and the time to understand.