Halcyon Equity Partners is planning to deploy capital into six to seven new investments, with plenty of dry powder remaining from its circa EUR 200m fund and 3.5 years left in its investment period, partner Eleni Bathianaki told Mergermarket.

Halycon is currently bidding on an ongoing auction process, she said, declining to say more.

The Athens-based private equity (PE) firm expects to build a portfolio of 12 to 14 companies, targeting some minority, but mostly majority stakes across diversified sectors. Average ticket sizes range between EUR 10m and EUR 15m, she said.

“We invest in the best of Greece – companies with strong teams, clear growth roadmaps and exportable brands,” Bathianaki said.

The fund held its first close in December 2023, and is now approaching final close at the end of this year, which will be nearly EUR 220m, she said.

Halcyon’s acquisition strategy centres on doubling or tripling company sizes within five to seven years, acting as a catalyst for growth before exiting to a larger strategic or financial investor.

A key part of the thesis is to leave value on the table for the next owner. “We need to allow the next investor to see the growth potential as well,” she added.

Growth is pursued through add-on acquisitions, geographic expansion, product development, and technology innovation, depending on the sector. The firm also works closely with portfolio companies to enhance management teams, corporate governance and commercial agreements.

Pharma logistics, consumer brands and internationalisation

Halcyon’s most recent transaction was AlfaOmega in May this year, a pharma logistics company serving international clients. The sector has become increasingly attractive because of the relocation of global pharma players to Greece, Bathianaki said.

Halcyon has already identified acquisition targets to scale AlfaOmega further. The firm sees strong exit potential in the pharma logistics space, with international financial investors actively consolidating the market.

“We like strong brands that are exportable,” she said.

For its wider portfolio buys, Halcyon has a preference for consumer non-food sectors and companies with international reach. Although the firm focuses on companies with Greek roots or affiliations, many targets generate significant international revenues, adding that some portfolio companies derive up to 50% of revenues from outside Greece.

Fundraising, advisors and leverage strategy

Halcyon is not yet preparing to raise a successor fund, Bathianaki said, noting that fundraising typically begins once 75% of the current fund is deployed. Given the pace of deployment and market conditions, she expects the next fundraise to begin in around three years.

The firm benefited from having a well-developed pipeline during its initial fundraising, allowing it to execute several deals early in the investment period. This gives Halcyon time to work with management teams and absorb market volatility.

“You don’t always have normal market conditions – having time to mature investments is crucial,” Bathianaki said, citing COVID-19 as a recent example.

Halcyon does not use buy-side advisors, but engages a range of firms for due diligence.

Financial, tax and ESG reviews are conducted by ‘Big Four’ firms. Halcyon does not hire investment banks for buy-side advisory, Bathianaki said, though she noted that Halcyon does work with advisors when entrepreneurs run formal sale processes.

Halcyon uses equity from the fund for its investments. Portfolio companies are typically leverage-free, but may access debt financing depending on growth plans and capital expenditure needs. “Greek banks have been very eager to cooperate,” Bathianaki said.

Bathianaki is a partner at Halcyon and has over 25 years of experience in M&A. She began her career at Citigroup and Morgan Stanley before returning to Greece in 2009, where she joined the strategy team at Piraeus Bank during the height of the financial crisis. She spent seven years there leading strategic projects and M&A, including both disposals and acquisitions. In 2016, she moved to the buy side as a partner at EOS Capital Partners, a EUR 150m fund. In early 2023, she co-founded Halcyon Partners alongside Yannis Bathianakis and Lykourgos Galanopoulos. The fund comprises seven investment professionals and one administrative employee.