“Every market has its own rules and problem; however, if investors find good businesses and good opportunities, they will start there. Mutual relationships, people and co-operation, which bring synergies and growth, are essential for investments,” was the main message of this AmCham Business Breakfast.

At AmCham Business Breakfast, titled “Business Ecosystem: Synergies between SMB, Large Businesses and Investors”, the discussion focused on investors that are a source of money, knowledge and an entry point into the market. We asked ourselves why we need a balance between small and medium-sized businesses (SMB) and large economic system, and whether Slovenian small and medium-sized businesses are interesting for investors.

Perspective of investors

In the first part of the discussion, led by Nevenka Črešnar Pergar, Director of NP Consulting and Co-Chair of AmCham Investment Committee, Michael Sopivnik, VP M&A, EMEA, Aquila Software, Andrzej Bartos, Executive Partner at Innova Capital, and Ludo Bammens, Managing Director, Head of EMEA Corporate Affairs, KKR, discussed the investment environment in Slovenia

Andrzej Bartos explained that Innova Capital is happy to be an investor in Slovenia, as he sees exceptional opportunities here. “Every market has its own rules and problem; however, if investors find good businesses and good opportunities, they will start there,” he said. “Trimo is actually categorized as an SMB; for us, growth is essential. If you’re small, you have to grow. And the only possible growth for Trimo is international. How to penetrate foreign markets, this is now one of our greatest challenges,” explained Bartos. He also added that one of the key challenges in Slovenia is human capital, as they have a lot of highly educated people, primarily engineers and workers in production, but lack management personnel to promote growth. “People are leaving Slovenia. Slovenia therefore has to address how to bring them back, so that they can help the country,” he added.

Aquila Software is a Canada-based company that takes over 60 companies each year, among them the Slovenia-based company Halcom, which they acquired in 2016. Michael Sopivnik explained that each year they analyze 2,000 companies as takeover targets, which have growth potential but lack sufficient assets. “These are good companies, good businesses, but with limited growth opportunities. And this is where we come in,” said Sopivnik, adding that all their companies are stable and have a large market share in their industry segments. He also said that generally, when taking over a company, they keep all employees, including managers, and that they keep the companies forever: “We do not sell companies. We therefore get positive responses from owners of family companies. People are scare of losing control, and we make sure that they don’t.”

Ludo Bammens, representative of the US-based investment fund KKR, said that he is glad there is a community of companies and investors in Slovenia that want growth, that want changes, and that want to be better at what they do. Bammens stated, as the second advantage of cooperation with their company, that when KKR invests in a company, it does not invest their own money, but money of funds financed by people. The third advantage of cooperation with their company is that, when companies start doing business with them, they enter a family of 150 other companies that were already invested in. “When companies want to expand, they ask is where to go and which country to invest in. These are companies from all industry segment, employing millions of people, and making over half a trillion dollars,” said Bammens, adding that the second part of the family is represented by companies cooperating with these 150 companies in which they have a share.

Because KRR wants to invest in Pro Plus in Slovenia, numerous parallels are being draw with German TV-station Pro7, which is also owned by them. “If we take over a company such as Pro Plus, we believe there are opportunities for growth and transformation that will significantly change the market. The media landscape is changing drastically, and we can all feel it. When you’re taking over media companies, it is a very sensitive subject; but you can ask anyone at Pro7 – as owners, we never interfered in content or editorial freedom. We will always respect the editorial policy, with a hands-off approach. We’ll help the company elsewhere, in the digital transformation,” explained Bammens and added that it’s important for local government and agencies to take the time and check their quality as investors by themselves. In his experience, such decisions take from one to nine months; in Slovenia, we are now approaching this deadline.

Perspective of traditional Slovenian companies

In the second part, two traditional Slovenian companies were presented, represented by Bojan Gantar, MBA, Executive Director of Alpina, and Gregor Benčina, President of Slovenijales Group. As Benčina explained, company growth can be based on know-how, quality and brand. “Jelovica brand is 105 years old. We built our story on the brand and quality, as we knew that is the only way to expand to other markets, from east to west,” told Benčina. “I believe that in Slovenia we need leaders in individual industry segment, which will pull smaller companies along,” he added, emphasizing that brand development is a longstanding and expensive process, but that other, smaller companies can then lean on a company that is successful on the global market.

Gantar also agreed that brands are very important for companies, adding that passionate, loyal, high-quality people and the knowledge they possess is extremely important for company growth. “Of course, we lack something in Slovenia, but because we have educated people and good stories, we’re good. We have to build on this, and attract new opportunities and new companies,” said Gantar, adding that smaller companies often have to connect to large companies for their success, as that is the only way to ensure further growth and success.

Perspective of small and medium-sized businesses

In the third part of the discussion, dedicated to small and medium-sized businesses, Igor Zorko, Director of ZZI, and Matjaž Čadež, founder of MBills, presented their perspectives. Matjaž Čadež, the previous owner of Halcom who sold it to Aquila Software, said that once he realized that he would have to move aside, he wanted the company to become part of a group where the spirit of Halcom could live on. “And we found this. Our philosophy is very similar, and Halcom has a clearly defined path,” said Čadež, who later founded MBills. Igor Zorko, who succeeded his father at the head of ZZI, explained that the company specialized, from big business transactions led by his father, into multiple areas where they develop quality services. “We’re strong in Slovenia and in the region, but we are aware that we need new know-how to enter the global market,” said Zorko.

As the main challenges facing small and medium-sized businesses, both speakers listed a lack of experience on global markets, the fact that managers in small companies in fact perform all functions, which is not a simple task, and attachment to family businesses, since it is in this case more difficult to decide to sell the company to a larger investor. “But the future is on our side. As much as 80% of global GDP is based on small companies,” explained Čadež, adding that the companies to prosper will be primarily those that look towards the future, and not the past.

Ludo Bammens about the synergy between SMEs and investors

Andrzej Bartos about the synergy between SMEs and investors

Igor Zorko about the synergy between SMEs and investors

We live stream all our AmCham Business Breakfasts, you can find the whole video HERE. 

You can see the photos of the event at our  Facebook page.