The Belgian government has released a new compromise - Unquote

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Sweden in focus unquote could say that the market was effectively closed for one year between September 2008 and September 2009, though of course some transactions got done,” he says. “For the right purchaser and the right borrower, we will consider underwriting up to €500m and potentially even more,” he adds. Finally, despite an improving local debt market, the fact that many of the large global investment banks are still not fully in play means the actual amount of debt available is limited and this has had a noticeable impact on the market in value terms. Even though more deals have taken place in 2010 to date than all of last year, the value of 2010 deals has actually seen a slight drop, falling from €3.25bn in 2009 to €2.9bn so far this year. In addition to this, only two buyouts valued at more than €250m have been completed in 2010 and the average value of deals is far lower than that seen before the financial crisis. “The transactions we have completed so far this year are smaller than our standard deal size. However, we do see a return of slightly larger deals in the near future,” says Wikse. Still, there are pockets of activity where even larger deals will get funded. Healthcare has been the sector attracting the most attention from potential buyers. “The healthcare sector is stable, relatively immune to business cycle fluctuations and therefore attractive for private equity funds,” says Wikse. There have been a number of deals, including Triton and KKR’s €850m acquisition of Ambea, showing that companies in this sector are still attracting big investments. With quality comes price, however, and as cash-rich private equity funds near the end of their investment period, there are real fears that the pressure to deploy capital will lead to “For the right purchaser and the right borrower, we will consider underwriting up to €500m and potentially even more” Simon Wakefield, SEB Merchant Banking inflated prices. Wikse is not too worried about this “What we are seeing in the Swedish market is that good quality assets will command high prices. However, lower quality assets are not finding buyers.” This sentiment is mirrored by Göran Barsby of CapMan “Of the few deals that are going through, the price reflects the quality.” The fact that funds still have a lot of capital to deploy has another effect; the exit market in Sweden is positive. “The exit market is very good,” says Wikse. “Sweden is experiencing strong activity while other markets are not performing as well. As a result, we have seen a number of GPs from outside the region coming in and buying assets through secondary buyouts.” Examples include Bridgepoint Partners’ acquisition of Solhaga and HgCapital’s secondary buyout of Frösunda LSS. Wikse also notes that trade buyers are increasingly active, but is less convinced of the strength of public markets. “The current volatility of public markets means that IPOs are not a very attractive exit route,” he explains. After the hugely difficult 2008 and 2009, it is unsurprising that appetite and confidence has rebounded, but it is also clear that there is little danger of a runaway market. As Göran Barsby says: “The mid-size buyout market is surprisingly small, despite the foundations being in place for there to be a lot more activity. We have companies with strong cashflow, a positive leverage market and funds with capital to deploy.” According to Barsby, concerns over the world economy are hampering dealflow. “Sweden is a country that is highly dependant on the export market,” he adds. Nevertheless, with reports suggesting that deal pipelines still appear healthy, the current situation could improve. As usual, only time will tell. ■ 12 UNQUOTE OCTOBER 10 ENTIRE CONTENTS COPYRIGHT 2010 INCISIVE MEDIA INVESTMENTS LTD www.unquote.com/nordics
© 2010 KPMG AB, a Swedish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. KPMG Private Equity Group The largest specialized Private Equity advisor in the Nordic market Our service offering include: • Financial due diligence • Commercial due diligence • Operational due diligence • Integration and Separation services • M&A tax including Fund and Deal Tax structuring For further information please contact: Sweden: Christer Wiberg, Head of Transaction Services +46 702 79 95 16, christer.wiberg@kpmg.se Sweden: Taus Wolfsberg, Head of Private Equity Group +46 733 27 20 62, tauswolfsberg@kpmg.se Finland: Berndt Schalin, Head of Private Equity Group +35 84 08 42 94 69, berndt.schalin@kpmg.fi Denmark: Soeren Krejler, Head of Transaction Services +45 25 29 37 26, skrejler@kpmg.dk Norway: Jonathan Farnell, Head of Transaction Services +47 40 63 90 81, jonathan.farnell@kpmg.no kpmg.com
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The Belgian government has released a new compromise - Unquote

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