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Acquisition of a majority stake in Polnord SA by Cordia International Zrt.

CATEGORY
Investment Deal of the Year, CEE
In 2020, as part of its international expansion strategy, Hungary-based Cordia International Zrt. acquired a majority equity stake (92,92%) in the Warsaw listed Polish residential developer Polnord SA. The transaction mainly involved: (1) the subscription for the newly issued Series T shares in Polnord SA, which represented approximately 65.66% of all of the shares in the company (including the newly issued shares); and (2) the acquisition of approximately 27.26% of the shares in the company within a tender offer for all of the remaining shares in Polnord. The tender offer was settled on 9 April 2020. The aggregate value of the transaction was approximately PLN 230.5 million (EUR 52.6 million). Importantly, Cordia has already recorded PLN 192.4 million (€42.2 million) of profits from the recent takeover.
Name of the deal
Acquisition of a majority stake in Polnord SA by Cordia International Zrt.
The date of closing the deal
09/04/2020
Value of the transaction (in EUR)
EUR 52.6M
Yield
EUR 42.2M
Seller, plus brief information about the company
Polnord SA is a Polish construction and development company operating on the residential and commercial property markets. Listed on the Warsaw Stock Exchange since 1999, Polnord is one of the most known residential development companies in Poland and a founding member of the Polish Association of Developers. For nearly ten past years it was selling over 1000 apartments annually. Its residential projects are located mainly in Warsaw, the Tri-city, Olsztyn, Szczecin, Łódź and Wrocław. Polnord has several valuable lands suitable for residential projects, of which the most valuable are the plots allowing for developments in the very attractive and popular recently built and developed residential area in Warsaw in Wilanów District. The Wilanów 2.0 is a large scale, urban regeneration mixed-use project launched by Polnord and will consist several residential and office buildings with a total area of more than 100,000 sqm.
Consultancy which advised Seller
DLA Piper, White & Case
Purchaser, plus brief information about the company
Cordia International Zrt. is a Hungary-based construction and development company and a member of the Futureal group. Over the last 19 years, Cordia has built and sold more than 7,000 apartments in Hungary, Romania and Poland. Currently it is developing an additional 4,000 units in 22 projects throughout the region, Spain and the UK, and have a further 13,500 homes in the pipeline. Recently, the company has acquired a British developer Blackswan, financing the transaction by using funds collected from its second bond issuance under National Bank of Hungary’s Bond Funding for Growth Scheme. Funds raised by Cordia’s first bond issuance financed the acquisition of Polnord SA. The transaction was of key importance to Cordia, which wants to become a dominant market player at European level. One of the most important element of its strategy is the expansion in Poland. Cordia aims to become one of the 10 largest players in Poland, handing over 1500 to 2000 flats per year.
Consultancy which advised Purchaser
Chajec Don-Siemion & Żyto, Rymarz Zdort, Salenter
Financing institution
N/A
Current occupancy level
N/A
Please say why this deal should be considered for the award
The transaction was of key importance to the Polish residential property market. First of all, prior to the transaction Polnord was struggling financially and slowly running out of options for a rebound. Since Cordia announced its interest in the acquisition, the company's share value has gone from 1,61 zł (11/12/2019) to even 4,70 zł (22/06/2020), a great news for both the investors and the company's clients. Second of all, Polnord has one of the biggest land banks of all the Polish development companies. In times of little land availability, a vast land bank is invaluable, and by buying it, the Hungarian-based purchaser has secured its future in Poland. Last but not least, the transaction was one of the biggest in the Polish residential market in recent years.