Number Crunch 2021Analysis of the Nordic PE market per Q3

If we compare with previous analyses per YTDQ3, the number of VC exits is increasing in 2021; it is now at its highest level since 2017 (see graph below). In 2019 and 2020, there were very few VC-backed exits, but now, the activity has started to pick up. It will be exciting to see whether Q4 confirms this trend.

Large exits include:

• Visa acquired the Swedish fintech company Tink for 1.8 billion euros. SEB Private Equity, Eurazeo, Creades, Insight Equity and Dawn Capital were among the investors that exited the company (read more).
• Workday acquired the Danish software company Peakon. Many VCs were involved in Peakon, including 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).
• EQT Partners and Play Ventures sold Finland-based Reworks to Playtika for 518 million euros. Both Reworks and Playtika develop games for mobile devices (read more).
• The employee scheduling service Planday was sold in a trade sale worth 248 million dollars to Xero Limited. Creandum, SEB Venture Capital and Idinvest Partners exited the Danish company (read more).
• Strossle, a digital content distribution platform, was sold for 200 million euros to the Dutch company Azerion. The Swedish venture fund Spintop exited the company formerly known as Sprinkle (read more).

In the venture segment, almost all exits involved ICT companies (84 %), followed by industrial (6%) and health care and life sciences (5 %) companies. See the pie chart below.

Even though the number of VC-backed exits in Sweden is below trend, most divestments were made in the Swedish and Finnish markets in the period (21 VC-backed sales in both markets). So far in 2021, 12 have involved Danish companies, and nine exits have involved Norwegian ones. See graph further down.

With one quarter left of the year, buyout funds have completed a total of 101 exits in the Nordics, which exceeds the exit level in 2020 as a whole (64). We need to go eight years back to find the same activity level in the segment per Q3. Compared with the corresponding period in the last five years, the number of exits was 50 per cent above the average. In short, 2021 could be a record year for the PE-backed sales in the Nordic region, depending on the activity level in Q4.

Among the most significant transactions, we find:

• EQT VI sold the pest control company Anticimex to the “sister fund” EQT IX (see large buyout transactions). In practice, EQT extended its investment by selling to a fund with a longer time horizon. The company was valued at 5.9 billion euros (read more).
• Nordic Capital sold Itiviti, a Swedish company that offers SaaS solutions to financial institutions, to the American fintech company Broadridge for 2.14 billion euros (read more).
• CVC Capital Partners (UK) sold AR Packaging to US-based Graphic Packaging in a trade sale valued at 1.45 billion dollars. Lund-based AR Packaging is Europe’s second-largest packaging producer (read more).
• Brunswick acquired Norway-based Navico in a transaction valued at 860 million euros. Among the vendors were Altor and Goldman Sachs Asset Management (US). Navico is a global company within marine electronics and sensors (read more).
• EQT sold the Norwegian weather service StormGeo to Alfa Laval in a transaction valued at 364 million euros (read more).
• BHG Group acquired Verdane-owned HYMA in a deal worth 159 million euros. HYMA holds a leading market position within garden, tools and leisure (read more).
• CASA, one of the largest housing developers and contractors in Denmark, which ActivumSG acquired. Butterfly Ventures (FI) exited the company after five years (read more).
• In a secondary transaction in July, AEA Investors (US) acquired Polygon from Triton (UK). The Swedish company prevents and mitigates the effects of damage caused by water, fire, and climate (read more).
• In June, the Copenhagen-based IT consulting company ProData Consult was sold from Polaris to Axcel, both Danish funds (read more).
• Visolit, which delivers IT solutions such as cloud services to the corporate market, was sold to Advania in August. At the same time, IK Investment Partners (SE) exited the Norwegian company following three years of ownership (read more).

Much of the sales growth took place in the secondary market, i.e., the sale of companies between PE funds. If we look at Q1-Q3 2021, the share of secondary exits is 35 per cent, which is an increase of 90 per cent compared with the average in the last five years. Usually, the most common exit route is trade sale, which is also most common so far in 2021. The number of trade sale increased by 55 percent compared to the average. See pie chart below.

If we break the exits down on sector, industry (42%), consumer (25%) and technology (18%) dominate. Most PE-backed exits involved Swedish (36%), followed by Danish companies (29%). There was outstanding growth in Denmark, where the number of exits has increased by 101 per cent compared with the average in the last five years. See graph and pie chart below.

If we look at the largest sector within PE-backed exits, industry, consumer and technology dominate as of Q3 2021.

With a lot of risk capital on marketplaces all over the world, and especially in the Nordics, IPOs have become an attractive exit strategy for PE funds. This is evidenced by the fact that 40 PE-supported companies have gone public so far in 2021. In comparison, the highest number of PE-backed IPOs during a calendar year was 39 in 2017. This record has thus been surpassed with one quarter to go in 2021.

About half of the IPOs in H1 involved Swedish companies (55%), followed by Norwegian and Danish companies with 18 and 17 per cent respectively. Finnish companies were involved in 10 per cent of the IPOs.

Several of the largest Nordic companies have looked to the major international marketplaces to raise capital. Three of the five largest IPOs, measured in market value, were in the global financial hubs New York and London. The largest (by far) was the listing of the Swedish food producer Oatly on Nasdaq at a valuation of 8.2 billion euros. The second largest was the Swedish biotech company Olink Proteomics at a valuation of 1.7 billion euros.

The largest Danish IPO was Trustpilot, a Danish consumer reviews site that was listed on the London Stock Exchange at a valuation of 1.1 billion euros. Among the Norwegian companies, the biggest listing was Elopak, a manufacturer of cardboard packaging, which was listed on the Oslo Stock Exchange at 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.