20 November 2019

Sweden: State of the Market and Dealmakers’ Expectations

By Suzy Bibko, EMEA Content Marketing Manager, Merrill Corporation

Although much of Europe has experienced some decline in M&A activity in 2019, Sweden appears to be holding its own, even despite the threat of recession.

Holding Its Own
We recently spoke to several practitioners about their thoughts on the trends and developments in the Swedish market, and all were in agreement as to where the Swedish market is at and where it’s heading. 

Lars Barnheim, Partner at Cederquist, agreed that the Swedish market has been strong, albeit with a bit of a slowdown in the past month, but nothing to be alarmed about: “Fintech, regulated assets continue to be very strong, attracting a lot of PE interest. We’ve seen somewhat of a defrost in the healthcare segment, which has been a bit under the ice for the last three, four, five years maybe. Otherwise very strong transaction activity.”

Staffan Ekstrom, Global and Nordic TMT Leader, Corporate Finance at EY, said he felt the same about fintech: “We see the continued importance of software deals in the Nordics.” However, Tomas Almgren, Managing Partner at Valentum, said, “We have seen a significant slowdown in the construction market…but we’ve still done three or four transactions last year that had exposure to the construction market, so it’s still possible to do the deals. We’ve seen a lot of activity in the restaurant and experiences space…there are a lot of fast-growing companies that are very attractive, and it’s a very attractive sector for financial sponsors as well.”

Source: EMEA Deal Drivers HY 2019

Indeed, the data bears this out. According to Thomson One data, Q3 in Sweden compensated for a weak first half of the year, with deal volume increasing by 20% and value up 71%. This holds true for the entire Nordic region, too. According to our Deal Drivers EMEA HY 2019 report, the Nordic energy and tech sectors remain the most attractive. And by deal count, the Nordics made up 16.7% of deals in the first half the year, second only to the UK & Ireland (21%).

Chart for Mix of Deals by Region

Going Forward
But what about the future? Going forward, Barnheim, Ekstrom and Almgren agreed that the market is slowing. However, Barnheim stressed that while a lot of people are saying that we are headed towards a downturn, “there is still an abundance of capital, the interest rates are likely to remain low and the companies are still performing.”

And Johan Martenzon, Director Corporate Finance, Technology M&A at EY, said, “We will probably see still high activity, although there is a slight discrepancy between sellers and buyers at the moment, but nice assets are still being paid a premium for.”

To hear what else they had to say, listen to the interviews below.

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