LEVENT BOSUT

Turkey 2020 | FINANCE | INTERVIEW

Given that Turkey will continue to be a preferred investment location for multinationals and financial investors, inHERA Capital stands ready to help buyers enter or expand in the country.

Levent Bosut
BIOGRAPHY

Levent Bosut, the founder of inHERA Capital, has led Oaklins Turkey since 1998. He is a seasoned investment banker and academic with extensive mergers and acquisitions, project financing, and restructuring transaction experience. He sold his own M&A boutique to TAIB Bank. He has held advisory and board member positions, including the chairman of Discovery Networks, Turkey and financial expert witness in the US. He taught MBA students at Rutgers, NJ, worked in venture investments in NY and in project finance at Finansbank. He holds a BS in mechanical engineering from Boğaziçi University, an MS from NJIT, and an MBA, ABD from Rutgers University.

How does the slowdown in M&A activity in Turkey fit within the global M&A narrative?
Within Turkey, M&A activity has declined from an annual average of around USD25 billion between 2010 and 2015 to less than USD10 billion in the last four years. M&A in 2019 was especially weak; however, with its dynamic private sector, favorable demographics, sizable and growing economy, and geographical advantages, Turkey will continue to be a preferred investment location for multinationals and financial investors. With the risk perception taming, international relations improving, and fundamental reforms underway, M&A deal flow and foreign investment interest will be on the rise again after 2020.

What global and domestic trends will drive M&A growth in Turkey moving forward?
The lira's depreciation has driven down asset prices. As a result, many local companies have become targets for strategic and financial investors as they may be available at lower multiples, and their performances can soar after a transformation. The normalization of Turkey, which has already started, will provide lucrative opportunities for investors who act before prices recover. Outside of this, the ongoing international trade war, specifically between China and the US, stands to benefit Turkish companies and will make acquisitions in the market more attractive. Many companies produce products that can replace Chinese- or US-made products that may be priced out of the market due to tariffs. Many local manufacturing companies have become even more competitive with the weak currency, so acquisitions accompanied by capital investments can make these companies regional champions.

In which sectors of the economy do you expect to see the most activity?
Most of the renewable and thermal power plants that have been built with substantial leverage cannot service their debts. This means many energy assets are available at attractive terms from their owners, as well as creditor banks. The automotive industry will also see a boost if some expected investments by multinational companies are carried out. We may see more automotive deals in the near future as investors try to get their share of the supply industry's growth. Naturally, the technology, service, and manufacturing sectors will have their share in M&A activity.
inHERA is the Turkish office of Oaklins. What is the importance of this relationship for inHERA's business in Turkey?
Oaklins is a leading global advisory firm providing M&A, growth equity and ECM, debt advisory, and corporate finance advisory services. We have a wide coverage in 40 countries, with industry experts in 15 industries and hundreds of niche sub sectors. Within Oaklins, we can access potential buyers at the right level with the help of our colleagues in the relevant countries and sector specialties. inHERA advises financial and strategic buyers to enter or expand in Turkey, grow geographically, consolidate fragmented industries, or expand their product and service offerings. For these often complex transactions, we offer our experience to handle the intricate details, bridge the expectations and any cultural gaps, and implement convincing win-win strategies to reach successful acquisitions or disposals on behalf of our clients. While assisting Turkish companies making acquisitions abroad, we utilize the local investment banks belonging to our extensive international organization. We can provide a responsive and seamless service to our clients by coordinating the entire process with our international offices around the globe.

In which sectors of the economy has inHERA recently been active?
The sectors in Turkey that we have recently been active in include services, including healthcare, laundry, automotive, consulting, logistics, and distribution; financial services, especially insurance; and heavy and light manufacturing, including medical equipment, electronic equipment, agribusiness, F&B, packaging, and energy. We are currently working on transactions within the energy industry and the waste management sector. In line with global trends, we also expect to see some activity in the logistics sector.