Transaction Trends Danish M&A Update - Q4 2020 - EY
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Transaction Trends Danish M&A Update – Q4 2020
High activity in the Danish M&A market in Q4 2020
After the slowdown in M&A activity in the 1st half of 2020 Last twelve months number of transactions by industry in Denmark Last three years EV/EBITDA by industry in Denmark (median)
Source: Mergermarket Source: Mergermarket
following the COVID-19 outbreak, Q4 2020 not only confirmed
the strong rebound in deal activity seen in Q3 but exhibited high Automotive & Automotive &
27 9.9x
growth. The number of announced deals has increased Transportation Transportation
significantly compared to Q3 2020 and exceeds the Q4 2019 Business & Prof. Business & Prof.
30 13.9x
Services Services
level by c. 55%. The strong recovery in deal activity in the 2nd half
Consumer Consumer
of 2020 resulted in a higher total number of deals in 2020 than in 25 11.3x
Products Products
2019. Engineering & Engineering &
52 14.2x
Ind. Products Ind. Products
During the fourth quarter of 2020, 115 The overall number of deals in the Danish Financial Financial
16 6.2x
transactions involving Danish companies market in 2020 was 321 compared to Services Services
have been announced. This is 36 deals 310 in 2019, which is driven by high Life Sciences 29 Life Sciences n.a.
more than the previous quarter and 41 activity levels in the 2nd half of 2020
deals more than last year’s fourth after a slowdown in deal making during Power & Utilities 19 Power & Utilities 4.4x
quarter. the 1st half caused by COVID-19.
Real Estate 23 Real Estate 11.8x
While the domestic and inbound deals Deal activity in the beginning of 2021 is
TMT 94 TMT 14.1x
both increased significantly since Q3 expected to continue the strong trends
2020, there is an even higher growth in but could be impacted by stricter COVID- Travel, Leisure & Travel, Leisure &
6 10.7x
Tourism Tourism
outbound deals of c. 112%. 19 regulations or new virus mutations.
During the course of 2021, it will be Note: EV/EBITDA by industry are only considering deals where target is based in Denmark.
In terms of transactions by industry, TMT Number of transactions by transaction type EV/EBITDA multiple is not available for Life Science due to low sample size.
interesting to see if the continued Source: Mergermarket
had the highest deal activity with 30 LTM
vaccination of the people in Europe and 120 112 115 400
deals compared to 23 deals last quarter. 100
especially Denmark and the associated 100 91 89
Engineering & Industrial Products 83 36
48 74 74 79 300
normalisation of everyday life will have a 80 34 73 69
confirmed high deal activity levels from 38 25 29
positive impact on deal making of if such 58 30
60 29 28 25 21 43 200
Q3 2020 with 24 deals in Q4 2020
effects are already fully factored into the 39 34 36 39 27
40 26
compared to 16 during the last quarter. 24 25 30 29 32 100
market. 20 13
27 27 24 28 36
21 20 21 19 19 18 17
Transaction Trends, published by EY Strategy and Transactions, is a 0 0
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20
quarterly publication that aims to identify trends in the Danish
2018 2019 2020
transactions market. Data presented in this newsletter covers all
transactions announced and registered in Mergermarket where Domestic Inbound Outbound LTM
Danish companies have participated as either target, buyer or vendor. Note: Domestic deals refer to deals where both, target and buyer are based in Denmark. Inbound and outbound deals, on the other hand, refer to deals where a Danish target was acquired or Danish buyers acquired a
foreign target respectively.
Transaction Trends 1st edition 2021 | 2Q4 2020 saw several relatively large transactions
Target region – Danish Buyers Top announced transactions last quarter (by deal value, USDm)
Source: Mergermarket Source: Mergermarket, CVR Virk, Capital IQ
Q4 2020 2020 Target
Ann. Date Target Vendor Buyer Deal dom. Industry Deal value*
Turnover
7% 0% 2%
1% 7% 3% 18 Nov RSA Insurance Group Plc Delisting Intact & Tryg Consortium Financial Services USD 9,550m USD 9,445m
Hellman & Friedman LLC; Bain
15 Nov Nets A/S Capital, LP.; Advent International Nexi S.p.a. Business & Professional Services USD 9,526m USD 1,194m
24% Corporation; GIC Private Limited
18%
51% 14 Dec Faerch Plast A/S Advent International Corporation A.P. Moller Holding A/S Engineering & Industrial Products USD 2,307m USD 454m
55%
15 Dec HD Ejendomme A/S Niam AB Heimstaden Bostad AB Real Estate, Hospitality & Construction USD 1,974m USD 43m
10 Dec Molslinjen A/S Polaris Private Equity EQT Partners AB Automotive & Transportation USD 1,000m USD 285m
15%
16% *Mergermarket definition
Denmark Europe (excl. Nordics) Asia-Pacific
On 18 November, a consortium of Intact Financial Corporation (“Intact”), a On 14 December, Advent International has signed an agreement to sell Faerch
Nordics (excl. Denmark) Americas Other
Canada-based and listed provider of automobile, home and business Plast A/S to A.P. Moller Holding. A.P. Moller intends to support the company's
insurance; and Tryg A/S (“Tryg”), a Denmark-based and listed non-life next growth phase by scaling its tray recycling facilities across Europe,
Buyer region – Danish Targets
Source: Mergermarket insurance company, have agreed to acquire RSA Insurance Group Plc (“RSA”), accelerating the transition towards mono-PET in Faerch's core market
the UK-based and listed provider of personal and commercial insurance. Intact segments, and pursuing further consolidation through M&A.
Q4 2020 2020
will retain RSA's Canadian, UK and international operations. Tryg will retain
3% 3% On 15 December, Niam AB has agreed to sell HD Ejendomme A/S, one of
0% 5% RSA's Swedish and Norwegian businesses whereas both companies will co-
1% Denmark's leading residential property companies, to Heimstaden Bostad AB,
4% own RSA’s Danish business.
a subsidiary of Heimstaden AB. The portfolio consists of 6,237 homes and 35
25% 21% On 15 November, Nets A/S and Nexi S.p.A have agreed on an all share commercial units geographically spread in Denmark.
44% merger. Nexi S.p.A. is a listed Italy-based PayTech company engaged in
47% On 10 December, EQT Partners AB has agreed to acquire Molslinjen A/S, the
merchant services & solutions, cards & digital payments and digital banking
Denmark-based ferry operator, from a group of shareholders led by Polaris
solutions, headquartered in Milan. Nets A/S is a Denmark-based company that
Private Equity, for a consideration of USD 1bn. The deal will support
provides payments, cards and information services, headquartered in
Molslinjen’s continued sustainability agenda through investments in the
Copenhagen.
25% 23% decarbonization of the ferry fleet and the acceleration of the transition to
renewable fuel sources.
Denmark Europe (excl. Nordics) Asia-Pacific
Nordics (excl. Denmark) Americas Other
Transaction Trends 1st edition 2021 | 3High share of public deals in Q4 2020
Transaction type by number of transactions Transaction arena by number of transactions
Source: Mergermarket Source: Mergermarket
Domestic Inbound Outbound Public Private
Q4 2020 31% 37% 31% Q4 2020 44% 56%
2020 36% 36% 28% 2020 37% 63%
2016 - YTD 36% 39% 25% 2017 - YTD 31% 69%
Note: Domestic deals refer to deals where both, target and buyer are based in Denmark. Inbound and outbound deals, on the other hand, refer to deals Note: Public deals refer to deals where either target, bidder or seller are public, i.e. a listed company.
where a Danish target was acquired or Danish buyers acquired a foreign target respectively.
Activity by target industry
Source: Mergermarket
Number of transactions
Target industry Last quarter 2020 Avg. 2016 - 2020 Trend
Automotive & Transportation 11 27 22
Business & Professional Services 9 30 36
Consumer Products 9 25 44
Engineering & Industrial Products 24 52 64
Financial Services 6 16 17
Life Sciences 6 29 25
Power & Utilities 6 19 16
Real Estate, Hospitality & Construction 11 23 21
TMT 30 94 80
Travel, Leisure & Tourism 3 6 12
Total 115 321 337
Note: Trend indicators refer to the comparison between the LTM vs. the avg. 2016 – 2020 number of transactions.
Transaction Trends 1st edition 2021 | 4OMX C20 shows continued growth
New Listings at Nasdaq Copenhagen Issues by Value, Nasdaq Copenhagen Foreign exchange rates (indexed)
Source: Nasdaq Nordics Source: Capital IQ, Mergermarket Source: Capital IQ
Main market 1.3
3 Private Placement IPO
First North 1.2
SEO Spin-Off/Split-Off
Buyback 1.1
2 DKK/USD
76.4 1.0
80
68.1
0.9 DKK/GBP
60 56.4
12 DKK/SEK
48.5 47.1 0.8
3 3 9 36.1 38.1
2 40
0.7
2 20 0.6
3 3 3
2 2
1
0 0 0 0.5
2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 2021
2013 2014 2015 2016 2017 2018 2019 2020
OMX C20 Index Avg. multiples of listed Danish companies
Source: Capital IQ Source: Capital IQ
Nasdaq Copenhagen (“CSE”) saw four new listings on First North and three new
1,500 listings on the main market in the fourth quarter of 2020.
36.7x
1,400 The companies listed on First North in the fourth quarter of 2020 are
33.8x
P/E
1,300 31.2x WindowMaster International A/S (27 October), Alefarm Brewing A/S (6
November), Dataproces Group A/S (13 November) and DecideAct A/S (16
1,200 32.7x
December), while the listed companies on the main market in the fourth quarter
1,100 of 2020 are HusCompagniet A/S (18 November), Boozt AB (20 November) and
4.2x
Q4 2020 GreenMobility A/S (17 December).
1,000
4.2x 2019
P/BV
900 4.5x 2018 The OMXC20 continued its growth journey after the COVID-19 related drop in
2017 March 2020 and increased approximately 7% during the fourth quarter. The
800 4.6x
Jan/20 Mar/20 May/20 Jul/20 Sep/20 Nov/20 Jan/21 index showed a declining trend in the beginning of the quarter but has increased
steadily throughout December 2020. At the end of the quarter the index
exceeded the pre-COVID-19 high from February 2020 by ca. 16%.
Transaction Trends 1st edition 2021 | 5EY supported deal of the quarter
Merger party one Deal description Services provided by EY enabling aligned
information sharing across workstreams
► Nexi SpA agreed to merge with Nets A/S to create a European
Nets A/S PayTech leader in an all-share merger.
Tax structuring
Copenhagen, Denmark ► The merger will enable the combined business to leverage a full and vendor fact
portfolio of solutions across the payment ecosystem with strong books
Financial
competences in acquiring and e-commerce, and the ability to vendor
Revenue EBITDA Operating cash flow EBITDA margin support international merchants with vertical-specific solutions
2020E 2020E 2020E 2020E assistance
based on flexible customer journeys across countries, payment databooks
1,050 380 230 36.2% channels and rails.
EURm EURm EURm ► The business will benefit from significant growth potential from SPA assistance
leadership and exposure to attractive European markets
(ranging from fast-growing Italy to the structurally attractive
Pro forma financials
Germany/DACH and Poland/CSEE regions to the highly
advanced and innovative Nordic markets)
Merger party two
The combined business at a glance Benefits to the client
► Seamless execution
Nexi S.p.a.
Milan, Italy Presence in +3,000 product EUR 7.8bn EV
25+ countries and tech dev. valuation for ► Unified response and one-point-of-contact for
specialists Nets client
Revenue EBITDA Operating cash flow EBITDA margin
2020E 2020E 2020E 2020E ► Buyer comfort in presented financials and
support in establishing transaction related
1,820 995 820 54.7% EUR 2.9bn in EUR 1.5bn in EUR 170m in
financials
EURm EURm EURm
revenue EBITDA estimated cash ► Flexible and agile response
Pro forma financials, incl. SIA merger and related synergies synergies
(pending completion of the deal)
Transaction Trends 1st edition 2021 | 6Contact list – EY Strategy and Transactions
Strategy Transaction Diligence Corporate Finance
Nicolai Strate Søren P. Krejler Lars Lyster Peter Vejlgaard Martin Wiig Nielsen
Nicolai.Strate@dk.ey.com Søren.P.Krejler@dk.ey.com Lars.Lyster@dk.ey.com Peter.Vejlgaard@dk.ey.com Martin.Wiig.Nielsen@dk.ey.com
+45 22 70 64 88 +45 25 29 37 26 +45 30 70 04 12 +45 20 40 80 41 +45 91 97 66 66
Morten Hvidt Frank Etmann Marcus Jacobsson Jon Skjernov
Morten.Hvidt@dk.ey.com Frank.Etmann@dk.ey.com Marcus.Jacobsson@dk.ey.com Jon.Skjernov@dk.ey.com
+45 25 29 35 69 +45 25 29 34 91 +45 51 58 29 31 +45 30 93 52 17
Mads K. Steensen
Operations and Tech Transaction Tax Valuation, Modelling & Real Estate
Mads.k.steensen@dk.ey.com
+45 25 29 31 27 Anders L. Tuxen Carina Maria G. Korsgaard Michael Bruhn Jacob Erhardi
Anders.L.Tuxen@dk.ey.com Carina.M.G.Korsgaard@dk.ey.com Michael.Bruhn@dk.ey.com Jacob.Erhardi@dk.ey.com
+45 25 29 44 62 +45 25 29 37 64 +45 25 29 31 35 +45 25 29 39 05
Complete and integrated services
covering preparation to closing
Niclas H. Sonne Torben Hartz Peter Frische
Niclas.H.Sonne@dk.ey.com Torben.Hartz@dk.ey.com Peter.Frische@dk.ey.com
+45 25 29 39 97 +45 25 29 34 85 +45 28 19 66 77
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Transaction Trends 1st edition 2021 | 7About this publication EY | Assurance | Tax | Strategy and Transactions | Consulting
Transaction Trends is a quarterly publication that aims to identify trends in the Danish transactions market. Transactions covered
in this publication are public and private transactions announced by all Danish companies, defined as a transaction where either About EY
the buyer, target or vendor company is a Denmark based company. Public transactions are defined as transactions where either EY is a global leader in assurance, tax, transaction and advisory services. The
the buyer, target or vendor company is listed on a public stock exchange. All other transactions have been classified as private. insights and quality services we deliver help build trust and confidence in the
Domestic transactions are defined as transactions conducted within a national boundary, i.e. deals involving two or more capital markets and in economies the world over. We develop outstanding
incumbent nationals, while cross border transactions involve companies from at least two different nationalities. Deal Value is leaders who team to deliver on our promises to all of our stakeholders. In so
taken as the sum of the consideration paid by the acquirer for the equity stake in the target plus the value of the net debt in the doing, we play a critical role in building a better working world for our people,
target, where applicable. Inclusion of net debt in the deal value will depend on the stake acquired or the target company type. for our clients and for our communities.
Transaction Statistics are based on Mergermarket and EY data. Public market data are sourced from S&P Capital IQ and Nasdaq. EY refers to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a separate
Transaction Trends is published by EY Strategy and Transactions. legal entity. Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. For more information about
our organization, please visit ey.com.
© 2021 EY Godkendt Revisionspartnerselskab
CVR no. 30700228
All Rights Reserved.
This material has been prepared for general informational purposes only and is not intended to be relied
upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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