Number Crunch H1 2021The Nordic region is buzzing with activity

The number of sales in the venture segment has increased in recent periods and is now at its highest level since the second half of 2018. In 2019 and 2020, there were very few exits of venture companies, but activity has begun to pick up. However, it is still a low level from a historical perspective.

Large exits include:

• The Danish software company Peakon was acquired by Workday. Many venture funds were on the ownership side of Peakon, both EQT Ventures, Atomico Ventures, Idinvest Partners, Balderton Capital, Sunstone Capital, Creandum Management and SEB Private Equity. The company was sold for 700 million dollars (read more).
• Swedish Tink, which has established itself in fintech, was acquired by Visa for 1.8 billion euros. Tink had both SEB Private Equity, Eurazeo, Creades, Insight Equity and Dawn Capital on the owner side (read more).
• Ginolis, a Finnish company in life science robotics and automated diagnostics, was acquired by the Swedish Cellink group for 70 million euros. Verso Capital and Innovestor were among the sellers (read more).

In the venture segment, almost all exits involved ICT companies (82%), followed by health care and life sciences companies (8%) and industrial companies (8%). See the pie chart below.

Despite the fact that the number of VC-backed exits in Sweden is below trend, most divestments were made in the Swedish market in H1. Traditionally, the exit activity in Finland is higher than Denmark and Norway, but in H1, there were about as many exits in these three markets. See graph further down.

Buyout funds completed a total of 68 exits of Nordic companies in the first half of the year. That is more than in the whole of 2020 (64), and we have to go eight years back in time to find the same activity level in the segment.¹⁸ Compared with the corresponding period in the last five years, the number of exits was 40 per cent above the average and more than three times as high as in the corresponding period in 2020. In short, 2021 could be a record year for the exits of companies in the Nordic region.

Among the most significant transactions, we find:

• Itiviti, a Swedish company that offers SaaS solutions to financial institutions, which Nordic Capital (SE) sold to the American fintech company Broadridge for 2.14 billion euros (read more).
• AR Packaging was sold by CVC Capital Partners (UK) to US-based Graphic Packaging in a trade sale valued at $ 1.45 billion. AR is based in Lund, Sweden and is Europe's second-largest producer of consumer packaging (read more).
• Brunswick, which acquired Norwegian Navico for 860 million euros from Altor (SE) and Goldman Sachs Asset Management (US). Navico is a global company in marine electronics and sensors (read more).
• The pest control company Anticimex, which EQT VI sold to EQT IX (see large buyout transactions). In practice, EQT extends its investment by selling to a fund with a longer time horizon. This is a nascent trend we are seeing, where buyout funds want to extend their ownership. In the transaction, Anticimex was valued at 5.9 billion euros (read more).
• EQT (SE) sold the Norwegian weather service StormGeo to the Swedish company Alfa Laval, in a transaction valued at 364 million euros (read more).
• ProData Consult was sold from Polaris to Axcel, both Danish funds, in a transaction worth 269 million euros (read more).
• Verdane-owned HYMA, which was acquired by BHG Group for 159 million euros. HYMA sells casual wear, garden tools and tools online (read more).

Much of the exits growth took place in the secondary market, transactions between private equity funds. If we look at H1 2021, the share of secondary exits is 40 per cent, which is an increase of 118 per cent. As per usual, trade sale was the most common exit route in the segment, with an increase of 60 per cent in the amount compared with the average over the past five years. See the pie chart below.

If break the exits down on sector, industry (41%), consumer (22%) and ICT (19%) dominate. Most PE-backed exits involved Swedish (38%), followed by Danish companies (31%). There was outstanding growth in Denmark, where the number of divestments increased by over 100 per cent compared with the average in the last five years. See graph and pie chart below.

If we look at the sector within exits of Nordic buyout companies, industry, consumer and technology dominate in the first half of the year.

With a lot of risk capital on marketplaces all over the world, and perhaps especially in the Nordic region, IPOs have become an attractive exit strategy for PE funds. This is evidenced by the fact that 37 PE-backed companies have gone public during the first half of the year. In comparison, the highest number of IPOs of Nordic PE-supported companies during a calendar year was 39 in 2017. This record is set to fall and illustrates the high level of activity so far in 2021. If we look at other years, there are already more IPOs of PE-backed companies in the first half of 2021.

About half of the IPOs in H1 involved Swedish companies (51%), followed by Norwegian and Danish companies (both accounted for 19%). Finnish companies were involved in IPOs in H1 (only 11%).

Several of the largest companies have looked to the major international marketplaces to raise capital. Three of the four largest IPOs, measured in market value, were in the global financial hubs New York and London. By far, the largest was the listing of the Swedish food producer Oatly on Nasdaq with a valuation of 8.2 billion euros. See the complete list of PE-backed IPOs in H1 below.

The largest Danish IPO was Trustpilot, a Danish consumer reviews site that was listed on the London Stock Exchange with a valuation of 1.1 billion euros. In the Norwegian market, the biggest listing was Elopak, a manufacturer of cardboard packaging, which was listed on the Oslo Stock Exchange with a market value of 738 million euros. In Finland, the most valuable stock exchange listing was the smart city company Sitowise, which was listed on the Nasdaq OMX Helsinki.