Case studies

Attractiveness of MBO keeps growing in the Czech environment – another significant transaction in the IT industry HOYA, uzavřený investiční fond, a.s. – acquisition of PPL’s biggest reloading station OPTREX – Management buy-out of the company

For years Unilever ČR has been besides others one of the leaders on the Czech household cleaning market. In 2013 an opportunity appeared when Bochemie Group decided to divest part of its business – company HomeBrands - represented by brands SAVO, BIOLIT and DIFFUSIL which were competing or complementary to Unilever brands. Unilever ČR acquired HomeBrands in the middle of 2013 and integrated it as its subsidiary company.

The financial studies concerned the valuation of real estate held by the CPI group that must be reported in compliance with IAS 40 – Investment Property for the purposes of IFRS. The purpose of the studies was to determine the fair value of real estate. It was a very extensive portfolio of diverse properties comprising real estate held by the companies in the CPI consolidated group. The properties were located in the Czech Republic and Slovakia, with the most significant being portfolios of residential premises, commercial retail properties, hotels and land for development. The studies were prepared both for the real estate included in a portfolio for regular revaluations and for newly acquired real estate.

In connection with the dynamic production of new car models, SUNGWOO HITECH s.r.o. and affiliated companies frequently make transfers of movable assets (machinery, technology). For SUNGWOO HITECH (or its associated companies), we prepared dozens of expert opinions on asset transfers to fulfil the requirements of the Commercial Code or tax laws.

An acquisition of one of the leading Czech IT companies focusing on the banking sector, which has been in the market since 1990, was completed in January 2013. RSM CZ helped the current General Manager acquire a 100% ownership interest.

The company HOYA, uzavřený investiční fond, a.s. (the “HOYA Fund”) has successfully executed the acquisition of land and entered into contracts on building the biggest transhipment point for parcels in the Czech Republic, with PPL CZ s.r.o., a member of DHL Group, being the tenant (the “PPL”). The investment reached CZK 300M.

During the ongoing concentration of activities of ČEZ Group and in connection with the consolidation of the heat production infrastructure in ČRZ Teplárenská, a.s., it was decided that a part of Teplárna Trmice, a.s. would be spun off and merged with ČEZ Teplárenská. The spun-off part of the company consisted of the heat distribution infrastructure in Ústí nad Labem and Termice. Considering the extent of the transaction, the board of the parent company ČEZ, a.s. discussed the valuation, which was subsequently performed using two methods – the income method, which quantified the overall income potential of the division subject to valuation, and the asset method, which consists in converting the historical book values of asset items to their actual value. In distribution infrastructure, one interesting area is the valuation of easements that often date back before the year 1990.

AVG Technologies Group is one of the world’s four largest producers of security software. At the beginning of 2012, it confirmed its success by entering the prestigious NYSE stock exchange, with market capitalization in excess of USD 500,000,000. RSM CZ began working with AVG Technologies in 2006, in particular on projects involving itemized valuation of assets and liabilities of acquired companies for the purpose of financial reporting elaborated pursuant to International Financial Reporting Standards. These valuation projects typically concern fast-growing software companies with breakthrough products or companies with an innovative business model which is beneficial to AVG Group.

We have prepared appraisal models of more than twenty photovoltaic power plants, including one wind power plant, for Raiffeisen - Leasing Real Estate, s.r.o., as part of an audit and for management purposes. The aim was to determine the market values of the power generating plants. We based our efforts on a pool of several dozen similar power generating plants that we appraised in the past two years.

In 2010 and 2011, CPI was the biggest investor in real estate in the Czech Republic. As CPI for the most part purchased real estate in share deals (i.e., it purchased whole companies that owned the real estate), it was necessary to perform due diligence, i.e., verify the tax, financial, and legal situation of each company to prevent the purchase from representing a risk for the buyer and to make it possible to handle risks, if any, in the contract. The tax department of RSM CZ performed tax due diligence and supervised financial due diligence, helped negotiate tax and financial guarantees in the contract on the transfer of shares, verified the calculation of the purchase price, and helped negotiate the price.