Off-Market Deal Origination in Central & Eastern Europe

The Market Beyond Businesses Formally for Sale

An acquisition market can be viewed in two different ways.

The first is through businesses already available for acquisition: adviser-led sale processes, auctions, investment opportunities circulated among buyers and transactions that have formally entered the market.

The second is considerably broader.

It consists of the entire universe of businesses that may fit an investor's acquisition strategy — including companies whose shareholders have not initiated a sale process and may never have publicly considered a transaction.

Off-market deal origination focuses on this second universe.

Instead of beginning with the question “What businesses are currently for sale?”, the process begins with: “What type of business does the investor want to own?”

That distinction changes the entire acquisition search.

Why CEE Is Particularly Relevant for Proprietary Origination

Central & Eastern Europe represents a large collection of individual national markets rather than one homogeneous corporate environment.

Poland, the Czech Republic, Slovakia, Hungary, Romania and the Baltic states differ in scale, language, ownership structures, sector composition and business culture.

At the same time, much of the region contains substantial populations of privately held and entrepreneur-led businesses.

For investors, this creates both opportunity and complexity.

Public databases, transaction announcements and adviser-led processes provide visibility into only part of the corporate landscape.

Companies fitting a particular investment thesis may exist across multiple jurisdictions without ever appearing in a conventional acquisition pipeline.

This makes structured market mapping and direct origination particularly relevant.

An Active Cross-Border M&A Environment

Central & Eastern Europe already attracts substantial domestic and international transaction activity.

According to the CMS Emerging Europe M&A Report 2025/2026, prepared with EMIS, 1,568 M&A transactions were recorded across Emerging Europe in 2025, representing an increase of 22.4% compared with 2024.

Cross-border activity represented a significant part of this market. The report recorded 953 cross-border transactions during 2025, while international investors from markets including the United States, United Kingdom and Germany remained active across the region.

Private equity involvement also reached a record level, with PE investors participating in 330 transactions during 2025.

Poland remained the region's largest M&A market by transaction volume, followed by Romania and the Czech Republic.

These figures demonstrate an active transaction environment.

They do not, however, measure the full universe of businesses that could potentially become acquisition opportunities.

That universe is considerably larger.

Off-Market Does Not Mean Secret

The term “off-market” can sometimes create the wrong impression.

It does not necessarily describe a hidden company, a distressed situation or a transaction conducted outside normal professional standards.

It simply means that a business is not currently being broadly marketed through a formal sale process.

An established company may be operating successfully with shareholders who have never instructed an adviser to sell it.

Those shareholders may nevertheless be willing to consider:

• a full sale
• a majority investment
• a strategic partner
• partial liquidity
• succession planning
• growth capital
• combination with a larger industry group

Whether such a conversation is possible cannot always be determined from public information.

It often requires direct dialogue with the shareholder.

Origination Begins with the Acquisition Thesis

Effective proprietary sourcing should not begin with sending large numbers of messages to business owners.

It should begin with a clear investment thesis.

The investor needs to define what constitutes a genuinely relevant acquisition opportunity. Depending on the mandate, criteria may include:

• geography
• industry and subsector
• revenue
• EBITDA
• enterprise value
• business model
• recurring revenue characteristics
• customer concentration
• export exposure
• ownership structure
• management depth
• strategic capabilities
• required level of ownership
• platform or add-on characteristics

Not every criterion needs to be absolute.

But without sufficient definition, market research becomes broad and owner outreach becomes indiscriminate.

Good origination is selective by design.

Step 1 — Define

The first stage is translating an investment strategy into practical search parameters.

For example, an investor may initially say: “We are looking for industrial businesses in Central Europe.”

That is not yet an actionable acquisition mandate.

A useful origination brief may need to establish:

• Which industrial subsectors?
• Which countries?
• What revenue or EBITDA range?
• Platform acquisition or add-on?
• Domestic or export-oriented?
• What ownership percentage is required?
• Are founder-led companies acceptable?
• Is management expected to remain?
• Which capabilities or customer groups are strategically important?
• What characteristics would immediately disqualify a target?

The clearer these parameters become, the more relevant the eventual target universe can be.

Step 2 — Map

The next stage is market mapping.

This involves identifying businesses that potentially fit the mandate irrespective of whether they are currently available for sale.

No single database normally provides the complete answer.

Relevant information may need to be assembled from multiple sources, including:

• corporate registries
• financial information
• industry databases
• trade associations
• company websites
• sector research
• transaction databases
• local business publications
• professional networks
• proprietary market knowledge

The objective is not simply to create the longest possible company list. It is to understand the structure of the relevant market.

• Who are the important independent operators?
• Which businesses are founder-owned?
• Which companies belong to larger groups?
• Which targets fall within the required size range?
• Which companies possess the strategic characteristics required by the investor?
• Where is ownership concentrated?
• Which businesses appear most relevant for further investigation?

This turns raw company data into an acquisition landscape.

Step 3 — Prioritise

A company matching numerical criteria is not automatically a good acquisition target.

Before approaching an owner, targets should be prioritised.

An investor may technically identify hundreds of companies within a sector, but only a smaller group may justify direct outreach. Prioritisation can consider:

• strategic fit
• business quality
• scale
• ownership
• market position
• likely transaction relevance
• geographic fit
• management characteristics
• known shareholder circumstances
• investor-specific priorities

This is one of the important differences between targeted origination and high-volume lead generation.

The objective is not to maximise the number of companies contacted. The objective is to maximise the relevance of the conversations created.

Step 4 — Understand the Ownership

Private-company origination ultimately involves people, not just companies.

Before approaching a business, understanding its ownership can materially improve the quality of the conversation. A company may be:

• controlled by its founder
• owned by several family members
• transitioning between generations
• owned by management
• controlled by another corporate group
• backed by an investment fund
• held by several shareholders with different objectives

Each situation can produce different transaction dynamics.

This is particularly important in CEE markets where many established businesses have developed from entrepreneurial companies created during the economic transformation of the 1990s and subsequent decades.

For some owners, questions of succession, liquidity and the future of the company may increasingly become part of long-term planning.

That does not mean these businesses are automatically sellers.

It means ownership context can matter as much as corporate fit.

Step 5 — Approach

The first owner contact is one of the most sensitive stages of proprietary origination.

An owner who is not actively selling the company has no obligation to engage. The approach therefore needs to establish credibility quickly.

A good initial conversation should make clear:

• who the investor is
• why this specific business is relevant
• what type of transaction is being considered
• whether the approach is exploratory or based on an active mandate
• why a conversation may be worthwhile
• how confidentiality will be handled

Generic mass outreach is particularly problematic in this environment.

A founder who has spent twenty or thirty years building a business can usually distinguish between a targeted approach and a template sent to hundreds of companies.

Relevance matters. So does tone.

Step 6 — Qualify

Owner interest alone does not create a transaction.

The next stage is determining whether there is sufficient alignment to justify further discussion. Questions may include:

• Is the shareholder genuinely open to considering a transaction?
• What type of transaction could be acceptable?
• Is timing compatible with the investor's strategy?
• Does the company actually fit the financial and strategic criteria?
• Are shareholder expectations potentially realistic?
• Would management remain involved?
• Are there obvious structural obstacles?

At this stage, discretion remains important.

The objective is not to force an owner immediately into a formal M&A process. It is to determine whether a credible basis for one exists.

Step 7 — Connect

Once both sides demonstrate sufficient preliminary alignment, the opportunity can move from origination into a more conventional transaction process.

Depending on the circumstances, this may involve:

• confidentiality arrangements
• initial information exchange
• management meetings
• indicative valuation discussions
• letters of intent
• due diligence
• financing
• legal and tax structuring
• regulatory analysis
• negotiation of transaction documentation

At this point, specialist legal, tax, financial and other advisers can be engaged according to the requirements of the transaction.

Origination does not replace transaction advisory. Its role is to create the opportunity for a transaction process to begin.

Why Local Context Matters

Market mapping can increasingly be supported by technology.

Owner access remains more human.

Company databases can identify legal entities. Financial information can help estimate size. AI and research tools can accelerate classification and screening.

But none of these automatically establishes trust with a shareholder.

Language, local context, business culture and credibility remain important — particularly where the owner has not decided to sell.

This becomes even more relevant when the investor is located outside the target country. A direct approach from an unfamiliar foreign organisation may raise immediate questions.

Local context can help explain the investor's rationale, establish credibility and determine whether there is genuine interest before significant resources are committed.

Technology Changes Origination — But Does Not Replace It

Modern acquisition sourcing increasingly combines human judgement with technology.

Data tools can make it possible to analyse larger company populations, identify sector characteristics, screen financial information and monitor ownership or corporate developments more efficiently than in the past.

Artificial intelligence can further assist with:

• company classification
• market research
• sector mapping
• information extraction
• preliminary target screening
• research prioritisation

These capabilities can materially improve origination efficiency.

But technology does not eliminate the need for judgement.

A company may appear attractive in a database and be strategically irrelevant. Another may have limited publicly available information yet be an excellent acquisition candidate.

And even the best target identification system cannot determine whether a founder is willing to begin a serious ownership conversation.

Technology expands research capability. Relationships create transactions.

The Difference Between Origination and Lead Generation

This distinction is fundamental.

Lead generation optimises for volume. Origination should optimise for relevance.

A lead-generation exercise might ask: “How many companies can we contact?”

A disciplined acquisition origination process asks: “Which companies should we contact, why are they relevant, who owns them and what is the credible reason for starting a conversation?”

The second approach produces fewer contacts. But those contacts should be considerably more meaningful.

For investors deploying substantial capital, this distinction matters.

Management time is limited. Investment teams should not spend it reviewing hundreds of poorly matched businesses.

A well-constructed origination process should progressively narrow the market:

• Total market
• Potentially relevant companies
• Prioritised targets
• Owner conversations
• Qualified opportunities
• Transaction processes

The value lies in the filtering.

Proprietary Does Not Mean Exclusive

Another important distinction concerns exclusivity.

An opportunity sourced directly does not automatically become an exclusive transaction. Once approached, an owner may decide to:

• continue discussions with the original investor
• speak with other potential buyers
• appoint an adviser
• initiate a broader process
• postpone the transaction
• decide not to sell

Investors should therefore avoid assuming that proprietary access guarantees a transaction.

Its principal advantage is different: it can create conversations with companies that were not previously part of the investor's accessible deal pipeline.

That can materially expand the opportunity set.

When Off-Market Origination Works Best

Proprietary sourcing tends to be most effective when the investor has reasonably clear acquisition criteria. Examples may include:

• A strategic buyer seeking a particular production capability in Poland.
• A private equity portfolio company pursuing add-on acquisitions across CEE.
• A family office looking for established businesses within a defined sector.
• A search fund seeking one platform acquisition within a specific size range.
• A holding company pursuing regional consolidation.
• An international company seeking market entry through acquisition rather than greenfield expansion.

In each case, the investor knows broadly what it wants.

Origination then converts that thesis into a target market and ultimately into owner conversations.

Common Mistakes

Several mistakes can reduce the effectiveness of an acquisition sourcing programme.

Searching only among businesses already for sale

This unnecessarily limits the potential target universe.

Defining criteria too broadly

A vague mandate produces a vague target list.

Prioritising quantity over relevance

Thousands of company names are not an acquisition pipeline.

Approaching owners without understanding the business

Generic outreach undermines credibility.

Treating the owner purely as a financial counterparty

Shareholder objectives may extend far beyond valuation.

Assuming no response means permanent lack of interest

Timing matters. Ownership circumstances change.

Assuming initial interest means a transaction will happen

Origination creates a conversation, not certainty.

A Long-Term Acquisition Capability

The most effective investors often treat origination not as a one-off project but as a continuing capability.

Markets evolve. Ownership changes. Businesses grow into the required size range. Succession questions emerge. Strategic priorities change.

Companies that are unavailable today may become relevant several years later.

For investors with a sustained acquisition strategy, maintaining an informed view of the target universe can therefore become a strategic asset in itself.

The objective is not simply to identify today's sellers. It is to understand tomorrow's potential counterparties.

Technology expands research capability. Relationships create transactions.