42014429 - Horizons Q1 2022_v06

ISSUE 1 | 2022

32

NORDICS HEAT CHART BY SECTOR

TMT

53 25% 52 25% 26 12% 25 12% 19 9%

Industrials & Chemicals

Consumer

Business Services

Deal-making sentiment in Pharma, Medical & Biotech and Energy, Mining & Utilities remained stable in the uncertain Nordic M&A investment climate, with the same flow of deals. Even though Real Estate activity remained on the low side, deal volume was up 100%. The acquisition of 3KR Norwegian Retail by the Canadian real estate-investor Slate Asset Management increased the sector’s total deal value by USD 120m. Looking at the quarter’s top 20 deals, nine transactions were cross-border deals between the Nordic countries, a decline from 13 in the previous quarter.

Regarding the roll-out of vaccines, the Nordic region is offering vaccinations to all its citizens and a large part of the population is now also being offered the booster shot to help keep the spread and hospitalizations at a minimum. Across the Nordics, more than 71% of the population are fully vaccinated and more than 26% of the fully vaccinated population have also received a booster. Nordic authorities are expecting the new variant to peak in early Q1 2022 and decline thereafter, which should help Nordic M&A activity to return to normal levels in the second and third quarters of this year. In conclusion, although the future situation around both the pandemic and inflation levels remain uncertain, investment activity by PE firms may stay at its current level. Once the pandemic’s levels of infection start to subside and societies begin reopening, we should see a return towards a more normal M&A transaction climate.

Pharma, Medical & Biotech

Financial Services

17

8%

Energy, Mining & Utilities

14 7%

Real Estate

4 2%

Leisure TOTAL

1

0%

211

NORDICS MID-MARKET VOLUMES BY SECTOR

2020

2021

LOOKING AHEAD

113

84

Moving forward, the uncertainty surrounding the continuing spread of the new omicron variant remains one of the key factors that may deter PE firms from making new investment opportunities and taking on more risk. The recent upsurge in inflation, both within the US and Europe, may also impact the future transaction climate as the interest climate is likely to change as well. Several Nordic acquisition conglomerates with ambitious acquisition plans, alongside PE firms’ large amounts of dry powder, are two important factors that can help to boost M&A activity in the coming quarters.

16

2 12 8

28

12

CLAES NORDEBÄCK PARTNER, CORPORATE FINANCE

62

88

claes.nordeback@bdo.se

21

26

24

31

13

25

53

61

Technology & Media

Financial Services

Energy, Mining & Utilities

Pharma, Medical & Biotech Real Estate

Consumer

Business Services

Leisure

Industrials & Chemicals

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