Why are investors from the Czech Republic buying Polish factories?
In 2024, we observed 14 closed transactions in which Czech capital took over Silesian production plants. Investors from the south are no longer just looking for cheap labor, but concrete technologies and free production capacities that are lacking in the areas of Ostrava or Brno.
Geographical proximity is not everything
Most people think that Czechs are drawn to us only by the short road on the A1 motorway. It's true that transport from Katowice to Ostrava takes a little over an hour, but the real reason lies deeper. Czech industry is saturated. There is a lack of land for new halls and, more importantly, people to work in shifts. In Silesia, we still have resources that allow Czech companies to quickly increase production without having to build everything from scratch for 3 years.
In the last quarter, we analyzed 7 inquiries from medium-sized companies from around Prague. They were mainly interested in plants employing from 42 to 86 employees. Such a scale allows for efficient takeover of control and implementation of Czech reporting systems in less than 5 months. For an investor from the Czech Republic, a Polish factory is often the only way to fulfill contracts for the German automotive sector, which their native plants cannot keep up with.
We calculate the real profit from each such operation. It often turns out that operating costs in Poland, despite rising energy prices, are still 12-16% lower than with our southern neighbors. This is a concrete argument that every serious investment fund from the Czech Republic puts on the table. Cultural proximity and the lack of a language barrier for basic technical communication only make it easier to close the transaction on schedule.
A Czech investor is not looking for promises. He wants to see 14 working CNC machines and a signed payroll from the last 3 years.
Metal and machinery industries in the crosshairs
The greatest interest is currently seen in companies involved in machining and the production of components for agriculture. Czechs have strong engineering traditions and are looking for partners in Poland who will maintain their technical standards. In 2024, the average value of transactions in this sector was 19.4 million PLN. These are amounts that for the owner of a Polish, family-run company are often a chance for a well-deserved retirement and securing succession that no one else was available to take over.
Silesia Capital Advisors participated in an audit of a plant near Gliwice, where a Czech holding company bought 84% of shares from the founder. The key factor was not the modern facade of the office building, but the hard data from the floor: ISO certificates refreshed in March and a machinery park whose average age did not exceed 6 years. Czechs appreciate Polish flexibility in short-run production, which is their weak point with the heavy load of their own factories.
It is worth noting that these investors rarely replace the entire management staff. They prefer to leave local production managers who know the realities of the Silesian labor market. They usually change accounting systems and financial controlling. We check every zloty in such processes, because Czech precision in Excel tables can be ruthless for Polish entrepreneurs accustomed to 'gut-feeling' management.
Mistakes that spoil a factory's valuation
A Czech investor is pragmatic to a fault. If there is a mess in the documents, the price drops by 15% at the very first meeting. The biggest problem in Polish factories is often unregulated land ownership issues or old environmental decisions that expired 2 years ago. During our audits at Silesia Capital Advisors, we often have to straighten these matters out urgently so as not to lose credibility in the eyes of the buyer.
Another point is relations with employees. Czechs are very afraid of sudden departures of key welders or operators after a change of owner. If a factory does not have an established bonus system or employment contracts are formulated vaguely, a legal audit will show high operational risk. In one case in August 2024, the lack of clear non-compete clauses for three main engineers lowered the valuation by 2.3 million PLN.
Without unnecessary adjectives – a factory must be ready for inspection at any time. Investors from the Czech Republic often arrive unannounced to see how the hall looks on a normal Tuesday at 2:00 PM, and not during an official visit. What matters to them is cleanliness at the machines, health and safety, and real coolant consumption. These are the small details that build trust more than expensive PowerPoint presentations.
Financing transactions and the role of an advisor
Cross-border transactions require a specific approach to settlements. Most Czech buyers finance the purchase with loans from banks in Prague, which involves the need to prepare financial reports according to international standards. Polish accounting offices are often not ready for this. At Silesia Capital Advisors, we ensure that reports from the last 3 years are readable for a Czech analyst, which shortens the time to close the contract by about 6 weeks.
Let's remember that the process of selling a factory takes an average of 7 to 11 months. This is not a quick auction on an online marketplace. It requires patience and constant contact with advisors on both sides of the border. Our role is to ensure that the emotions of the owner, who built the company for 23 years, do not stand in the way of hard price negotiations. Facts on the table is the only language a Czech industrial holding board understands.
By the way, it's worth mentioning that Czech commercial law is in some places more rigorous than Polish, especially regarding the liability of board members. Investors transfer these standards to Polish soil, which for the seller means the need to provide solid guarantees and warranties for the technical condition of the plant. One should not be afraid of this if the company is run reliably and has no hidden legal defects.
When selling a company for 20 million PLN, a mistake in environmental documentation can cost the owner up to 1.5 million PLN in contractual penalties.
What to expect in 2025?
Forecasts for Silesia are clear: interest from Czech capital will not drop. We see this in the number of new inquiries that reached us in November. Investors are starting to look for companies in the green energy and plastics recycling sector. Poland is becoming a natural production base for them because the costs of building new capacity in the Czech Republic have risen by 31% over the last two years.
At Silesia Capital Advisors, we expect the M&A market in the Katowice and Gliwice region to be dominated by 3-5 large players from Brno, who consolidate smaller Polish plants into one strong supply group. For local entrepreneurs, this is the last moment to prepare their business for sale on favorable terms. Prices are high now, but management quality requirements are growing every month.
In summary, if you run a factory in Silesia and think about exiting the investment, the Czech Republic is your most natural direction. They do not require the same bureaucracy as funds from the USA or Germany, while paying fair market rates based on hard asset and EBITDA profit valuation. We check every zloty so our clients are not left with nothing after many months of talks.
