After a period of turbulence, we look back on a 2020 which entailed, notwithstanding the prevailing uncertainty, a very strong year. When last year is summarized in Mergermarket's report, we can look back on yet another year with high activity, where Vinge takes first place both in relation to the number of transactions and transaction value in Sweden.
The year 2020 was a year with high activity, particularly during the latter part when the market position stabilized. Following the record year 2019, the year started at a normal rate, with a certain expectation of a downturn. When the pandemic hit, almost all of the transactions stopped, only to be subsequently resumed at a higher rate during the following months. We are now seeing a favourable position in relation to a number of industries which are not affected by the turbulence of the last few months. We can also see how several trends from the last year will continue during the course of 2021.
During April-May, many of our clients focused primarily on existing transaction flows within their operations and financing as a consequence of the pandemic, which resulted in lower M&A activity. From June, the position returned to normal and increase steadily thereafter and resulted in a significant amount of activity and a very large number of deals during the autumn. Over the past few months, we have also seen a large number of public offers.
”We have seen a very strong autumn with an unusually high amount of transaction activity, where the market reversed the downturn which we had seen during the first half of the year. We have noticed strong activity within both venture capital, small, mid and large cap. It is particularly positive to note that the large cap segment has also been high active, which had been the type of transactions which suffered the most during the first half of the year. With a large number of mandates which are either ongoing or at the start-up phase, the high activity looks like it is going to continue during the first half of 2021“, says Jonas Bergström, partner and Head of M&A.
During 2020, Vinge has been engaged in 96 transactions to a total value of USD 22 billion as well as in conjunction with seven listings on the main market. This is the highest figure for both the number of transactions and transaction value among business law firms in Sweden in 2020.
For both IT/Tech as well as health/healthcare/pharmaceuticals, it has been a profitable year with a large amount of activity, but also for industries with significant stability, such as land and facilities as well as installation, recycling and waste management, which have not been affected adversely by the pandemic.
Christina Kokko, partner and one of Sweden’s pre-eminent transaction lawyers, particularly highlights “buy and build” as the phenomenon in some of the year’s most interesting deals:
“During the year we have seen several exciting transactions of particular interest, where the trend is buy and build, namely that Private Equity in the mid‑market segment performs platform investments, and then acquires a number of smaller companies and forms a really large company. A number of clients have done this during the year. In this context, the real estate, building and installation markets have also seen high activity.”
“The trends which we could see during the previous year look as though they are going to continue. We have a lot of private and public M&A in the pipeline for the spring but also IPOs. The industries continue to be IT/Tech as well as health/healthcare/pharmaceuticals but also fintech, installation, facilities as well as all types of energy‑related transactions. We can see that there is a very broad spectrum overall.”
There has also been a great deal of activity within public M&A over the last year, notwithstanding the prevailing uncertainty. Following the downturn in March, the stock exchange recovered quickly, although probably at least partly driven by stimulus measures. We have been able to see a good mix of capital procurements, listings and public M&A, as well as also strategic transactions in a public environment.
Jesper Schönbeck, partner and Head of Capital Markets and Public M&A, particularly emphasizes the consolidations within the real estate sector, growth within e‑trading and financing of the service industry as trends during 2020. The year also offered several interesting transactions of particular interest:
”We have seen many interesting transactions which are both large, have a mix of shares and cash as consideration and contain a cross‑border element. These include SBB’s bid for the Norwegian company Entra, EQT’s bid for Recipharm and Alfa Lava’s bid for the Finnish company Neles, these are the ones which particularly stand out.”
”We have noticed a continued high amount of activity in relation to listings and many founder‑managed companies with a relatively limited sale of existing shares. In this context, listings have become the form of part-exit rather than procurement of capital. We have also seen trends with more strategic deals in the public M&A environment and additional financing in the share market.”, says Jesper Schönbeck.