Sale of companies owned by PE funds
The number of exits increased in the first half of 2023 compared to the second half of 2022, where the number of exits were record low. The increase is mainly driven by an increase in the number of exits in the buyout segment. At the same time, it is the lowest number of exits in the first half of the year since Argentum started tracking the market, as venture exits remain low.
After a couple of years with high exit activity from the second half of 2020 until the first half of 2022, exit activity remains low in H1 2023, as in H2 2022. 42 exits in the Nordic private equity were completed in the first half of 2023.
Number of exits in the venture segment were especially low in the first half of 2023.
Private equity-backed sales in the venture segment remains record low
10 sales by Nordic venture companies were completed in the first half of 2022, up from 8 sales in the second half of 2023. The number of exits in the last year has been lower than any previous periods since Argentum started tracking the market. Compared to the first half 2022, there was a decrease of 73 percent, and 71 percent compared to the average over the last five years. The valuation of many early-stage technology companies fell in early 2023, making the exit market especially difficult for these companies.
Major sales include:
- Bocap and Finnvera both sold their shares in Nanocomp to Radiant Opto-Electronics, an opto-electronic components manufacturer from Taiwan. The transaction valued the company at approximately EUR 14.5 million.
- Verdane Capital sold a majority stake in Nomentia, a leading European treasury and cash management software provider, to Inflexion. (Read more)
Half of all companies sold in the venture segment were technology companies. The remaining sales were divided between the industrials sector, accounting for 40 percent, and the consumer sector, which represented 10 percent. See the pie chart below.
Half of exits in the venture segment involved technology companies, followed by industrials making up 40 percent. The remaining 10 percent were made up by the consumer sector. No exits involved health care and life science companies.
The number of sales in the venture segment has witnessed a significant decline across all Nordic countries compared to the first half of 2022. The most notable decrease was in Norway, where no sales were recorded in the first half of 2023, a sharp contrast to the 10 sales recorded during the same period in 2022. Similarly, Denmark also did not register any sales within the venture market in the first half of 2023. The majority of sales were attributed to Swedish companies, accounting for 60 percent of all exits, with a total of 6 transactions. The remaining 4 sales involved Finnish companies. See the graph below.
Only ten venture exits were made in the first half of 2023. The last year, no venture exits have been registered in either Denmark or Norway.
Sales activity increased from a record low level in the buyout segment in 2022
Buyout funds completed a total of 32 sales of Nordic companies in the first half of 2023. After falling to a record-low level of activity in the second half of 2022, activity in the first half of 2023 has increased. Nonetheless, this level still stands at 36 percent lower compared to the same period in 2022, and down by 34 percent compared to the five-year average for the first half of the year.
The largest transactions include:
- Bridgepoint Capital sold Diaverum to industrial buyer M42 for about $2 - $2.5 billion. Sweden-based Diaverum is a dialysis company and the deal made M42 the largest healthcare company in the Middle East according to a company statement (read more).
- Danish company Ellab was sold by EQT to industrial buyer Novo Holdings. Novo is the most valuable European company as of October 2023. The transaction values Ellab at EUR 1 billion according to Bloomberg. Ellab is a leading validation & monitoring provider for the Biotech and Pharmaceutical industries (read more).
- Danish company Scan Global Logistics was exited by AEA Investors. The company was acquired by CVC Partners in February. Scan Global Logistics is a global transport and logistics provider. The deal is said to have valued the company at $1.5 bn (read more)
- Norwegian company Kabal was sold by Norvestor to Insight Partners. Kabal provides logistics software-as-a-service platform for the energy industry. Insight Partners is a global software investor based in New York (read more).
- Danish Oona Health was sold by AnaCap Financial Partners to industrial buyer Topdanmark in March. The deal valued the company at about €300 million (read more).
Most sales transactions where secondary exits, which typically involves the transfer of companies between private equity funds. In the first half of 2023, 38 percent of exits were secondary exits, a notable increase from the 30 percent recorded in the same period in 2022. The second most common sales route involved sales to industrial players, accounting for 28 percent of buyout deals in the first half of 2023. See the pie chart below.
38 percent of portfolio companies in buyout deals were sold to other PE funds. The proportion of sales to industrial players (Trade Sale) also remains high at 28 percent.
The sector distribution of sales in buyout deals shows 28 percent of company sales both within the industrial sector and the consumer sector. 16 percent involved health and life sciences and 13 percent within ICT.
If we look at the sector within sales of Nordic buyout companies, it is industry, consumer and healthcare and life sciences that dominate after the first half of 2023.
The majority of PE-backed sales were attributed to Swedish companies, accounting for 38 percent, followed by Danish companies at 28 percent, and Finnish companies at 22 percent. In contrast, only 13 percent of PE-backed sales involved Norwegian companies. This distribution of sales differs from historical trends, with Danish and Swedish companies seeing relatively higher shares, while Norwegian companies have a correspondingly lower share. See the graph below.
PE-backed sales are highest in Sweden, and relatively equal in Denmark and Finland. The level of activity in Norway has been lower than usual.
Full stop in PE-backed IPOs
In 2020 and 2021, the number of PE-backed IPOs was high. 2021 was a particularly good year for PE-backed IPOs, breaking all previous records throughout the Nordic region. However, in 2022, it slowed down with few IPOs. In 2023, the market for PE-backed IPOs has come to a halt. This is not isolated to the private equity industry; listings have halted across various sectors. In general, the number of IPOs in the Nordics has seen a dramatic decline in 2022 and continues to do so in 2023.