Buyout deals in the Nordics
Buyout funds completed 148 investments in Nordic companies per Q3 2021, a record number and 20 per cent higher than the previous record. The amount invested was also very high, with a growth of 143 per cent compared to the average level for the last five years. Industrial companies make a comeback as the most attractive sector, and we find three such companies among the most substantial transactions.
2021 has been characterised by high activity in the Nordic buyout segment. Per Q3, buyout funds have made 148 investments, an increase of 56 per cent compared with the average for the period between 2016-2020.
In combination with many investments, buyout funds have invested vast amounts of capital in Nordic companies throughout the period, 15.8 billion euros in total. Historically, this is the highest amount in the segment per Q3.
After a dip in 2020 (see sector and country distribution), the industrial sector attracted the most investments and involved three of the foremost transactions per Q3. The health sector also attracted huge investments (see single large transactions).
Sector and country distribution
Investments split evenly between sectors in the period, but industrial companies attracted the most (36 %). Following a decline in 2020, when the covid-19 pandemic made it challenging to carry out, e.g. physical factory visits investments in companies in industrial goods and services created a comeback in 2021.
The second-largest sector was consumer (23 % share), followed by ICT (22 %), health services and life sciences (8 %), and financials (5 %).
Compared with the average for YTDQ3 between 2016-20, industrial goods and services experienced substantial investment growth (+86 %), in addition to financials (+56 %).
Following a decline in 2020, when the covid-19 pandemic made it challenging to carry out, among other things, physical factory visits, investments in companies in industrial goods and services have made a comeback in 2021.
Compared with the average for YTDQ3 between 2016-20, industrial goods and services experienced substantial investment growth (+86 %), in addition to financials (+56 %).
If we look at the land distribution in the buyout segment, investments in Swedish and Danish companies accounted for two thirds. However, there was growth in all markets compared to the average of the period over the past five years:
- Swedish companies attracted the most buyout investments in the first half of the year with a share of more than a third (36 %) and a growth of 16 per cent compared to the average.
- Close behind were Danish companies with 31 per cent of the investments. Here there was a growth of a formidable 41 per cent against the average.
- Norwegian companies attracted 20 per cent of the investments, which was 15 per cent higher than the average for the period.
- Finnish companies accounted for a share of 15 per cent. In Finland, growth has been weakest, with a marginal decline of one per cent.
Large single transactions
The industrial sector had several of the most significant transactions in the buyout segment per Q3 2021. In addition, we find a bunch of investments in other sectors that stand out in terms of size:
Industrials
- In June, EQT invested Anticimex. The transaction valued the Swedish pest control specialist at 5.7 billion euros (read more).
- Partners Group (CH) has acquired the Finnish company Parmaco, which rents out educational and kindergarten buildings. The sellers were the PE funds Terra Firma and Metric Capital (both UK), which have been on the ownership side since 2018. Partners Group invests 450 million euros in the company and at the same time values it at 750 million euros (read more).
- In March, Norsk Hydro sold its rolled and recycled aluminium business to KPS Capital Partners (US), which renamed the company Speira. The transaction valued the company at around 1.4 billion euros (read more).
- EQT Infrastructure and Nysnø Klimainvesteringer have joined the ownership side of the Norwegian transport group Torghatten. Torghatten operates ferries, speedboats, buses, and air traffic throughout Norway. The transaction valued the company at around 1.1 billion euros (read more).
- CVC Partners (UK) bought 100 per cent of the shares in STARK Group, a company headquartered in Denmark that is the leading distributor of heavy building materials in Northern Europe (read more).
ICT
Utilities
- In March, KKR (US) invested in the Finnish grid and electricity company Caruna (read more). The Espoo-based company maintains, repairs, and builds a weather-resistant power grid for almost 700,000 Finnish electricity customers.
Health care and life sciences
These ten companies received about half of the capital invested in the first three quarters of 2021. In contrast to previous years, where one or two investments have claimed large chunks of the total invested amount, there were many medium-sized transactions. We see the same development in the venture segment.