Alston & Bird today released a new report, Nordic–U.S. M&A Study, that shows a significant increase in private-equity-backed (PE) transactions, both inbound and outbound, between the Nordic countries – Denmark, Finland, Norway, and Sweden – and the United States during 2015–2017.
The study shows that Nordic PE-backed acquisitions of U.S. targets jumped during the period by 350 percent – from two deals in 2015 to nine in 2017 – with Swedish firms leading the way. Of the 14 PE-backed acquisitions of U.S. targets completed over the three years, all but one were by Swedish PE firms.
While on the other side, U.S. PE firms accounted for the two largest Nordic M&A transactions reported: Hellman & Friedman’s $5.9 billion buyout in 2016 of Verisure Holding AB, a Swedish provider of security services and solutions, and Blackstone Group’s $4.1 billion purchase in 2017 of Sponda Oyj, a Finnish real estate investment firm.
“Acquisitions by U.S. PE firms of Nordic targets continue to be on a steady uptick, likely due to a strong dollar and a continuing hot U.S. sellers’ market making U.S. PE firms look more and more for overseas buying opportunities,” said Soren Lindstrom, Alston & Bird partner in the firm’s Corporate Transactions & Securities Group and a Denmark native who advises Nordic and other European companies in U.S. legal matters, including M&A transactions. “This analysis hints at how PE transactions may play a continuing larger role in cross-border deal making, with no signs of slowing down.”
Looking at broader M&A activity beyond PE-backed deals, the study also shows that during the three-year period, U.S. buyers were significantly more acquisitive than Nordic buyers, with U.S. buyers acquiring a total of 197 Nordic targets with a combined value of $30.3 billion. Conversely, Nordic buyers acquired a total of 119 U.S. targets representing $18.2 billion in value. In other words, U.S. buyers made 66 percent more investments in the Nordic countries than Nordic buyers in the United States.
While M&A volume was up overall for U.S. buyers for the past three years, it declined from 75 transactions in 2016 to 62 in 2017 – a drop of 17 percent. However, the value of those deals increased: from $9 billion in 2016 to $10.3 billion in 2017 – a 14 percent rise.
On the other hand, the number of acquisitions of U.S. targets by Nordic buyers has remained steady: 45 transactions in 2016 versus 44 in 2017. But total deal value fell off by more than 25 percent – from $8.7 billion in 2016 to $6.3 billion in 2017.
Among the study’s other findings:
- Swedish M&A – Although transactions between the U.S. and Sweden overall lead the pack for the three-year period, acquisitions of U.S. targets by Swedish buyers dropped materially in 2017, and surprisingly, Swedish targets appear to have fallen out of favor for U.S. buyers and dropped sharply year over year. That said, Swedish PE firms have shown an increased interest in U.S. targets for the same period.
- Potential in Demark – Deal flow between the U.S. and Denmark has been relatively steady, with a trend toward increased interest in Danish targets by U.S. buyers.
- Technology and industrial targets are in favor – The industries that have received the greatest amount of M&A activity include information technology and industrial products and services.
The data included in this study are based on research of databases of M&A transactions. They do not include results where buyers are not disclosed.
To see the full study and learn more about Nordic–U.S. M&A activity, please click here.