White & Case partners Jan Andruško, Jan Stejskal and Eva Svobodová have co-authored the Czech chapter of the Chambers and Partners Private Equity 2023 Global Practice Guide.
The chapter provides insights into the private equity landscape in the Czech Republic, examines the local legal framework and highlights the latest trends and developments shaping the Czech private equity scene.
Private Equity Transactions and M&A Deals in General
In 2022, there was a slowdown in deal activity due to a combination of political (most notably the invasion of Ukraine) and economic factors (in particular, rising interest rates and cost of capital combined with double-digit inflation and increased labour costs). In 2023, deal activity has picked up, and there is renewed interest from private equity houses in the Czech market and the broader CEE region, although it is unlikely that this will match the unprecedented investment drive during the pandemic years, especially 2021.
Overall, the focus of the Czech private equity world appears to have shifted from manufacturing targets to more innovative and complex industries such as services, health and pharma, and IT.
One notable development in recent years has been the growing preference for partial investments resulting in joint ventures with existing owners. This is in contrast to the prior focus of private equity firms on acquiring either full ownership or super-majority stakes in companies. While co-investment by selling founders or incoming managers has long been a staple on the market, we are now seeing an increasing number of transactions between various types of investment groups, eg, private equity houses joining forces with private wealth/family offices.
Any views expressed in this publication are strictly those of the authors and should not be attributed in any way to White & Case LLP.
The article is reproduced with permission from Chambers and Partners. This article was first published in Chambers and Partners Private Equity 2023 Global Practice Guide in September 2023.
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