EBITDA by Industry in despite slightly lower Danish M&A activity · 2020-02-06 · Travel, Leisure...
7
Transaction Advisory Services Transaction Trends Danish M&A update – Q3 2019 Multiples are still high despite slightly lower Danish M&A activity During the third quarter of 2019, Danish companies announced a total of 65 transactions. This is 8 deals less than in the previous quarter and 26 deals less than last year’s third quarter. This is driven by a decrease across domestic, inbound and outbound deals. Number of Transactions Source: Mergermarket Last Twelve Months Number of Transactions by Industry Source: Mergermarket 16 38 36 74 15 20 21 22 81 16 Automotive & Transportation Business & Prof. Services Travel, Leisure & Tourism Power & Utilities Consumer Products Life Sciences Financial Services Engineering & Ind. Products Real Estate TMT 24 21 23 15 16 27 27 24 28 21 20 18 37 35 52 32 37 39 26 34 36 39 24 21 30 34 41 24 27 34 38 25 48 29 29 26 0 100 200 300 400 0 20 40 60 80 100 120 4Q17 89 2Q18 LTM 4Q16 1Q17 65 2Q17 1Q18 91 3Q17 3Q18 4Q18 1Q19 2Q19 3Q19 91 90 83 116 71 100 80 112 73 LTM Outbound Domestic Inbound In terms of activity by industry, TMT and Engineering & Industrial Products saw the highest deal activity (17 and 14 respectively), while last quarter’s runner-ups Business & Prof. Services and Consumer Products keep their positions with and 8 and 6 deals respectively. The overall number of deals in the Danish market in the LTM period 3Q19 was 339 compared to 354 in LTM 3Q18. Mergermarket reports that global volumes were slightly below the levels observed in 2017, making 2018 the first year-on-year decline in global deal volume since 2010. This trend has continued for the first three quarters of 2019. For Denmark however, there was an increase from 2017 to 2018 which may indicate stronger momentum or a delayed slow down. 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. 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. Last Three Years EV/EBITDA by Industry in Denmark (median) Source: Mergermarket 11.1x 11.8x 10.9x 12.7x 9.0x 16.7x 5.8x 5.5x 14.3x Automotive & Transportation Business & Prof. Services Life Sciences Consumer Products Engineering & Ind. Products Power & Utilities Financial Services Real Estate TMT Travel, Leisure & Tourism n.a. 386 357 Transaction Trends, published by EY Transaction Advisory Services, is a quarterly publication that aims to identify trends in the Danish transactions market. Data presented in this newsletter covers all transactions announced and registered in Mergermarket where Danish companies have participated as either target, buyer or vendor.
Transcript of EBITDA by Industry in despite slightly lower Danish M&A activity · 2020-02-06 · Travel, Leisure...
Transaction Advisory Services
Transaction TrendsDanish M&A update – Q3 2019
Multiples are still high despite slightly lower Danish M&A activity
During the third quarter of 2019, Danish companies announced a total of 65 transactions. This is 8 deals less than in the previous quarter and 26 deals less than last year’s third quarter. This is driven by a decrease across domestic, inbound and outbound deals.
Number of TransactionsSource: Mergermarket
Last Twelve Months Number of Transactions by IndustrySource: Mergermarket
16
38
36
74
15
20
21
22
81
16
Automotive &Transportation
Business & Prof.Services
Travel, Leisure &Tourism
Power & Utilities
ConsumerProducts
Life Sciences
FinancialServices
Engineering &Ind. Products
Real Estate
TMT
24 21 23 15 16 27 27 24 28 21 20 18
37 3552
32 3739
26 34 36 3924 21
30 34
41
2427
3438 25
4829
2926
0
100
200
300
400
0
20
40
60
80
100
120
4Q17
89
2Q18
LTM
4Q16 1Q17
65
2Q17 1Q18
91
3Q17 3Q18 4Q18 1Q19 2Q19 3Q19
91 9083
116
71
100
80
112
73
LTMOutboundDomestic Inbound
In terms of activity by industry, TMT and Engineering & Industrial Products saw the highest deal activity (17 and 14 respectively), while last quarter’s runner-ups Business & Prof. Services and Consumer Products keep their positions with and 8 and 6 deals respectively.
The overall number of deals in the Danish market in the LTM period 3Q19 was 339 compared to 354 in LTM 3Q18.
Mergermarket reports that global volumes were slightly below the levels observed in 2017, making 2018 the first year-on-year decline in global deal volume since 2010. This trend has continued for the first three quarters of 2019. For Denmark however, there was an increase from 2017 to 2018 which may indicate stronger momentum or a delayed slow down.
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.
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.
Last Three Years EV/EBITDA by Industry in Denmark (median)Source: Mergermarket
11.1x
11.8x
10.9x
12.7x
9.0x
16.7x
5.8x
5.5x
14.3x
Automotive &Transportation
Business & Prof.Services
Life Sciences
ConsumerProducts
Engineering &Ind. Products
Power & Utilities
FinancialServices
Real Estate
TMT
Travel, Leisure &Tourism n.a.
386357
Transaction Trends, published by EY Transaction Advisory Services, is a quarterly publication that aims to identify trends in the Danish transactionsmarket. Data presented in this newsletter covers all transactions announced and registered in Mergermarket where Danish companies have participated as either target, buyer or vendor.
Ann. Date Target Vendor BuyerDeal Dom. Industry
Deal Value*
TargetTurnover
06 AugNets A/S (Majority of Corporate Services
businesses)Nets A/S
MasterCard
IncorporatedFinancial Services USD 3,193m n.a.
18 Sep
Orsted A/S (Power distribution business, City
Light business & Residential customer
business)
Orsted A/S SEAS-NVE a.m.b.a. Power & Utilities USD 3,153m n.a.
16 Sep Alder Biopharmaceuticals, Inc. Listed H. Lundbeck A/S Life Sciences USD 1,574m - **
04 JulyYIT Corporation (paving and mineral
aggregates businesses)YIT Corporation Peab AB
Real Estate,
Hospitality &
Construction
USD 316m USD 680m*
01 Jul SteelSeries ApSL Catterton Management Limited;
ClearVue Partners LPAxcel Management
A/STMT USD 303m USD 157m*
Key highlights and market outlook
On 06 August, MasterCard, the New York-based payments
technology company has announced to acquire the majority of
the Denmark-based Nets A/S’ corporate services businesses for a
consideration of USD 3,193m. The acquisition complements
MasterCard’s existing technologies and makes it possible to
expand its customer base with an increased focus on the Nordic
region. Further, the transaction complements with Mastercard’s
recently announced role in developing the future account-to-
account payment infrastructure in Denmark.
Top announced Transactions last Quarter (by deal value, USDm)Source: Mergermarket, CVR Virk
*Mergermarket definition** Clinical-stage biopharmaceutical company, hence no revenue
Over the last quarter, the Danish market experienced 65
deals. While this is slightly lower than deal volumes seen in
the last quarter, it is significantly lower than last year’s
third quarter and the average quarterly deal volumes for
the past four years. On a quarterly as well as on an LTM
basis, the market has been driven by transactions within the
sectors Engineering & Industrial Products (3Q19: 14; LTM:
74 deals) and TMT (3Q19: 17; LTM: 81 deals).
In spite of rising geopolitical and regulatory concerns, EY’s
Global Capital Confidence Barometer indicates that the
overall appetite for deal-making will continue to be strong in
2019. As for Denmark, we still see a robust pipeline of deals
and expect high M&A activity level in the coming twelve
months.
On 16 September, H. Lundbeck A/S, a Danish
pharmaceutical company, has announced the acquisition of
the clinical-stage biopharmaceutical company, Alder
BioPharmaceuticals, for a consideration of USD 1,574m.
Alder is developing eptinezumab for the preventive
treatment of migraine, which is expected to launch in the
U.S. in 2020. The transaction supports Lundbeck’s aim to
deliver a long-term sustainable growth.
On 04 July, Peab AB, the Sweden-based company engaged
in providing civil engineering and construction services, has
announced to acquire YIT Corporation’s paving and mineral
aggregates businesses in Finland, Sweden, Norway and
Denmark. The transaction will help Peab to expand its
presence Sweden, Norway and Finland and will provide Peab
an entry into Denmark through paving business of YIT.
On 18 September, Ørsted A/S, the listed Denmark-based
company engaged in procuring, producing, distributing and
trading energy and related products, announced that it has
signed an agreement to sell its power distribution,
residential customer and City Light business to SEAS-NVE
a.m.b.a., the Denmark-based company engaged in providing
energy and communication services, for a consideration of
USD 3,153m.
On 01 July, Axcel Management A/S, a Nordic private equity
firm has acquired the Denmark-based manufacturer of
gaming accessories, SteelSeries from L Catterton
Management Ltd, the largest and most global consumer-
focused private equity firm. SteelSeries has become the
leading premium brand in the gaming category and the
transaction enables SteelSeries to continue to build on its
momentum.
Transaction Trends 2nd edition 2019 | 2
Buyer Region – Danish TargetsSource: Mergermarket
Activity Breakdown by region
The share of Danish targets among acquisitions of Danish
buyers remained constant in Q3 2019 at the level of 59% from
Q2 2019. Throughout the past two years, this percentage has
remained at a similar level, mainly fluctuating between 50%
and 60%. In the LTM period, the share of Danish targets is at
60% which is slightly below average since 2016 (61%).
The share of American targets (9%) in the third quarter
remained at a high level compared to the average since 2016
(6%), while being slightly lower than in the LTM period. The
level of Nordic targets (excl. Denmark) of 14% shows a further
increasing trend compared to the previous quarters in 2019
(12% in 2Q19 and 8% in 1Q19).
Q3 2019
59%
14%
16%
9%0%
2%
LTM
Transaction Trends 2nd edition 2019 | 3
Target Region – Danish BuyersSource: Mergermarket
Q3 2019
LTM
In the third quarter of 2019, 26 of 47 acquisitions of Danish
targets (55%) were made by Danish buyers. In the LTM period,
52% of all these buyers were Danish. The absolute number
remained at a fairly constant level (47 in 3Q19 vs. 53 in
2Q19).
The slightly decreasing share of foreign buyers is mainly
driven by a decrease in buyers from Europe (excl. Nordics)
and the Americas. Deal appetite in the Nordics (excl. Denmark)
and Asia-Pacific is slightly offsetting this trend by increasing
marginally compared to the LTM period.
60%
11%
17%
10%1%0%
Denmark
Europe (excl. Nordics)
Asia-PacificNordics (excl. Denmark)
Americas
Other
55%
19%
13%
6%6% 0%
52%
15%
19%
9%4%
0%
Europe (excl. Nordics)
Denmark
Other
Nordics (excl. Denmark)
Americas
Asia-Pacific
5%4%
Activity Breakdown Denmark
The share of deals, where both buyer and target are privately
owned (not listed), remained at 72% like in the second quarter
of 2019 and is also slightly higher than in the LTM period
(71%).
While the share of cross border deals in 3Q19 (60%) was
slightly lower than in previous periods, the composition of
Domestic and cross boarder deals is overall unchanged.
TMT as well as Engineering & Industrial Products were again
the industries showing the highest activity in 3Q19, while
Power & Utilities indicates the highest QoQ-growth amongst
all industries (150%).
Activity by Target Industry – Domestic and Cross Border DealsSource: Mergermarket
Number of Transactions
Target Industry Q3 2019 LTM 2018 Avg. 2016 – 2018 Trend indicator
Automotive & Transportation 2 16 24 22
Business & Professional Services 8 38 43 42
Consumer Products 6 36 53 58
Engineering & Industrial Products 14 74 73 70
Financial Services 2 15 23 20
Life Sciences 3 20 21 25
Power & Utilities 5 21 16 14
Real Estate, Hospitality & Construction 6 22 25 20
TMT 17 81 91 80
Travel, Leisure & Tourism 2 16 17 13
Total 65 339 386 364
Note: Trend indicators refer to the comparison between the LTM vs. the avg. 2016 – 2018 number of transactions
Transaction Trends 2nd edition 2019 | 4
Transaction Type by Number of TransactionsSource: Mergermarket
Transaction Arena by Number of TransactionsSource: Mergermarket
28%
29%
28%
72%
71%
72%
Q3 2019
LTM
Public
2017 - YTD
Private
40%
39%
37%
60%
61%
63%
Q3 2019
LTM
2016 - YTD
Domestic Cross Border
Note: Public deals refer to deals where either target or bidder are public, i.e. a listed company
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.
Public Market Update
New Listings at Nasdaq Copenhagen
Issues by Value, Nasdaq CopenhagenSource: Capital IQ, Mergermarket
Avg. Multiples of listed Danish CompaniesSource: S&P Capital IQ
Transaction Trends 2nd edition 2019 | 5
OMX C20 Index Source: S&P Capital IQ
Foreign Exchange Rates (indexed) Source: Capital IQ
12 2
3 3
9
32
3 3
2
1
0
2018 YTD192013 2017
0
2014 20162015
Main market
First North
Source: Nasdaq Nordics
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
2013 2014 20192016 20172015 2018
DKK/GBP
DKK/USD
DKK/SEK
800
02013 2014 20172015 2016 2018
500
2019
100
200
300
400
600
700
900
1.000
1.10022.7x
3.4x
22.8x
3.3x
21.7x
3.4x
24.2x
3.5x
P/E
P/BV2018
YTD 2019
2016
2017
Nasdaq Copenhagen (“CSE”) saw no new listings in the third
quarter of 2019, neither on the Main market nor on First
North.
The companies listed in 2019 are therefore still Maersk
Drilling A/S (April 4) on the Main market and Konsolidator A/S
(May 10), Waturu A/S (May 20) and Danish Aerospace
Company A/S (May 27) on First North.
The OMXC20 increased by approximately 3.5% during the
third quarter, subsequent to a decrease of 1% in Q2 2019 and
an increase of 14% in Q1 2019. Domestic markets seem to be
robust to the current rise of political uncertainty and rising
interest rates. Going forward, the interest rate developments,
and the potential continuance of market turmoil, will be key
items to follow.
0
10
20
30
40
50
60
70
80
2013 2014 2015 2016 2017
49.1
2018 YTD19
36.1
76.4
56.4
48.5
38.1
46.9
Private Placement
Spin-Off/Split-Off
IPO
SEO
Buyback
Transaction Diligence
Contact list - EY Transaction Advisory Services
Complete and integrated services covering preparation to closing
EY Transaction Advisory Services
Søren P. Krejler
+45 25 29 37 26
Lars Lyster
+45 30 70 04 12
Frank Etmann
+45 25 29 34 91
Marcus Jacobsson
+45 51 58 29 31
Corporate Finance
Peter Vejlgaard
+45 20 40 80 41
Martin Wiig Nielsen
+45 91 97 66 66
Transaction Tax
Carina Maria G. Korsgaard
+45 25 29 37 64
Niclas H. Sonne
+45 25 29 39 97
Valuation, Modelling & Economics
Michael Bruhn
+45 25 29 31 35
Jacob Erhardi
+45 25 29 39 05
Torben Hartz
+45 25 29 34 85
Strategy and Operations
Nicolai Strate
+45 22 70 64 88
Cuong Nguyen
+45 25 29 37 30
Tech
Jon Skjernov
+45 30 93 52 17
Lars Fejer
+45 25 29 34 28
Global reach and local presence with 10,000 transaction professionals
Transaction Trends 2nd edition 2019 | 6
About this publication
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 the buyer, target or vendor company is a Denmark
based company. Public transactions are defined as transactions where either the
buyer, target or vendor company is listed on a public stock exchange. All other
transactions have been classified as private. Domestic transactions are defined
as transactions conducted within a national boundary, i.e. deals involving two or
more incumbent nationals, while cross border transactions involve companies
from at least two different nationalities. Deal Value is 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 target, where applicable. Inclusion of net debt in the
deal value will depend on the stake acquired or the target company type.
Transaction Statistics are based on Mergermarket and EY data. Public marketdata are sourced from S&P Capital IQ and Nasdaq.
Transaction Trends is published by EY Transaction Advisory Services.
About EYEY is a global leader in assurance, tax,transaction and advisory services. Theinsights and quality services we deliverhelp build trust and confidence in the
capital markets and in economies theworld over. We develop outstandingleaders who team to deliver on our
promises to all of our stakeholders. In doing so, we play a critical role in buildinga better working world for our people, for
our clients and for our communities.
EY refers to the global organisation,and may refer to one or more, of themember firms of Ernst & Young GlobalLimited, each of which is a separate legalentity. Ernst & Young Global Limited, aUK company limited by guarantee, doesnot provide services to clients. For moreinformation about our organisation, pleasevisit ey.com.
© 2019 EYGM Limited.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.
ey.com
EY | Assurance | Tax | Transactions | Advisory
