Advokatfirmaet Wiersholm

Nordic Buy Out Forum 2024 – Summary and Highlights

On 5 December, Wiersholm hosted the 14th edition of the Nordic Buy Out Forum with the overarching topic «Driving Growth: Leveraging Technology and Market Dynamics».

With more than 650 registrations and attendees working in M&A, venture capital and private equity in the Nordics and beyond, the Nordic Buy Out Forum is the largest M&A event in the Nordics. This year’s Nordic Buy Out Forum featured 17 speakers from across Europe, who provided insights and statistics on current market trends in private equity, venture capital and bonds, along with deep-dive sector presentations on sectors such as healthcare, seafood and AI. To end the day, the future outlooks and geopolitics post the US election were presented.

Opening Remarks

The Nordic Buy Out Forum kicked off with some insightful remarks from Wiersholm partner and Nordic Buy Out Forum founder and host, Jarle Kvam. Reflecting on the M&A market trends, Kvam shared statistics illustrating a stabilization in 2024 following a slowdown in 2023. Despite private equity remaining at a low, accounting for 20% of the market volume, there has been a 13% increase in buy-side activity. The sector-wise deal volume has been predominantly in technology, with increasing interest from private equity in the pharma, medical, and health sectors.

The global landscape, marked by wars and elections, also influences the M&A outlook, with increased regulatory demands and fluctuating cross-border activities, particularly as Europe navigates the uncertainties of US trade policies. Despite this, the first three quarters of 2024 saw a 5% increase in M&A deal volume across the Nordics.

Following Kvam, Wiersholm’s newly announced partner Andreas Gustavsson, delivered the market trends for the real estate sector. Gustavsson described a heightened focus on deal risk management, with thorough preparation phases including detailed term sheet negotiations becoming more common. This approach extends to an increased focus on due diligence and contract negotiations.

Within the real property sectors, logistics and data centers are experiencing growth, driven by ongoing digitalization and technological advancements. Despite a 20% drop in prices from the peak of real estate, Gustavsson expressed uncertainty about whether this decline is sufficient to dampen interest and enhance yields in these sectors.

Jarle Kvalm og Andreas Gustavson, Wiersholm

Next to take the stage at the Nordic Buy Out Forum was Ellen Amalie Vold, CEO of the Norwegian Venture Capital Association (NVCA), a long-standing supporter of the event. Vold shared statistics illustrating the impact of private equity on job creation. She highlighted that 5% of Europe’s total workforce of 236 million is employed by companies backed by European private equity. Since 2001, employment in these companies has shown a steady increase, with an 8.5% growth in Norway up until 2023.

As for the current state of the Nordic fundraising climate, 75% of fund managers have experienced a worsening in the fundraising environment over the past few years. Despite these challenges, 58% of managers still report moderate access to capital, while 29% are facing a lack of capital. This has led to 10% of fund managers, who initially planned to raise funds in 2024, postponing their funding efforts to 2025.

The sectors currently in focus for the fundraising climate include ICT, SaaS, and renewable energy. These industries are particularly significant as they address major societal challenges related to energy transition and demographic changes. Seeing this convergence of focus, Vold expects many fund-raising managers will be chasing after the same investors. Vold summaries the climate as tough but highlights that there is still considerable dry powder available.

Part 1| Navigating growth and value creation during turbulent market conditions

Part 1 of the conference featured presentations from:

Key takeaways included:

Private equity outlook – poised for resurgence after significant reset, albeit with new rules of the game // Guillaume Rubens, BCG

Guillaume Rubens from BCG’s Private Equity department opened the first session of the conference titled «Navigating Growth and Value Creation During Turbulent Market Conditions», providing valuable insights into the European and Nordic markets, alongside some predictions on the outlook for 2025 and onwards. In his address, Rubens reflected on the challenges faced in 2023, describing it as a sobering year that presented the industry with a triple challenge going into 2024: difficulties in deal-making, realizing exits, and fundraising. Despite these obstacles, he noted early signs of recovery in European deal activity and projected a strong outlook for 2025. This optimism is supported by indicators such as lowering interest rates, increasing dry powder, and a backlog of assets ready for realization.

Rubens pointed out that despite the challenges of the last years, buyout funds have shown resilience and continue to outperform the public market. Looking ahead, Ruben raised the possibility of the need for private funds to adapt to a ‘new normal’ characterized by higher interest rates, necessitating enhanced operational value creation within their portfolio companies. He references the sentiments of last year’s speaker, Hugo Maurstad, on the imperative for Private Equity funds to focus on improving the companies which they already own.

Guillaume Rubens, BCG

Picking the Right Startups to Invest In: The Good, the Bad, and the Ugly Truths // Raja Skogland, The Visionary Company

Raja Skogland, the founder and CEO of The Visionary Company and an investor in over 100 startups, discussed the complexities of startup investments. She highlighted the high potential rewards but also the significant risks, including a startup failure rate of over 90%. Skogland addressed key challenges for angel investors such as securing the right deal flow and the necessity for thorough due diligence. She pointed out several red flags for investors, including lack of transparency and excessive reliance on funding. Critiquing the investment ecosystem, she noted issues like the focus on rapid fundraising over sustainable growth and common investor errors like poor guidance and board involvement that could lead to valuation declines. However, she also noted successful cases like Chooose.today and Firi.com, attributing their success to strong founding teams and early international expansion. Skogland emphasized the investor’s responsibility to diversify, professionalize boards, and invest in familiar areas to reduce risks.

The role of venture capital in accelerating the growth of successful next generation companies // Trond Riiber Knudsen, TRK Group

Next up was the experienced investor Trond Riiber Knudsen from TRK Group. Knudsen shared his insights on the important role of venture capital in nurturing the growth of next-generation companies, highlighting the need for Norway and Europe to ramp up their engagement in the venture capital sector. Knudsen emphasized the importance of applying rigorous investment criteria to identify companies with the potential to make a significant impact. Important factors to be considered are the uniqueness and complementarity of the team and product idea, the timing of market entry, and the potential for traction and subsequent investment stages. Additionally, Knudsen pointed out the transformative impact of AI on the venture capital industry. AI not only enhances decision-making, but the lack of geographical barriers and the enhanced data also attracts international investments to Norway, thereby emphasizing the critical role of innovation in driving future growth.

From Small Shop to Nordic Leader in 4 years: A CEO’s Key Takeaways for M&A Success // Sten-Roger Karlsen, Investinor

Sten-Roger Karlsen, now the CEO of Investinor, shared insights from the expansive growth journey as the CEO of Ørn Software, highlighting key takeaways from nine acquisitions conducted over four years. He outlined the company’s M&A strategies, which included consolidating core markets by acquiring companies with similar product offerings within the SaaS sector, expanding the product portfolio through adjacent offerings, and pursuing geographic expansion by acquiring market leaders in new, related areas. Karlsen also addressed the challenges and lessons learned from these M&A activities, noting that 83% of mergers fail due to factors such as culture clashes and poor execution. To avoid these pitfalls, he emphasized the importance of thorough planning and effective cultural integration. Key strategies he shared included maintaining transparent communication with employees of acquired companies, establishing uniform reporting routines, and allocating adequate resources for post-integration processes to ensure a smooth transition and successful integration.

Achieving More // Frode Strand-Nilsen, FSN Capital

Frode Strand-Nilsen, the founder and chairperson of FSN Capital, drew inspiration from iconic figures and management philosophies to discuss effective leadership and organizational success. He highlighted the influence of Peter Drucker’s management by objectives, which evolved into the Objectives and Key Results (OKR) methodology, famously adopted by companies like Intel and Google to achieve significant growth. Strand-Nilsen advocated for less busyness and more reflective thought to set ambitious goals that foster creativity, emphasizing the importance of building trust, collaboration, and empowerment within teams. His reflections urged individuals and organizations to look beyond immediate challenges and plan strategically for future opportunities, embodying the mindset of anticipating where the ‘puck’ is going, rather than where it has been.

Buy-out financing – a commodity or a forgotten superpower // Karl Dalby Skjelbred and Christel Heckmann, Danske Bank

To conclude the first session of the day, Karl Dalby Skjelbred and Christel Heckmann from Danske Bank shared their insights on the evolution and strategic importance of buyout financing. With over 50 years of combined experience, they discussed historical market shifts such as the tech boom and various financial crises, and analyzed their impact on credit, IPO, and equity markets. Skjelbred and Heckmann also delved into the competitive landscape of financing products, including bank loans, direct lending, and high yield bonds, underscoring the necessity for bespoke, strategic financing solutions. They addressed the trend towards commodification in the financing sector, driven by the pursuit of a level playing field, and emphasized the importance of tailored approaches for unique buyout deals. Finally, Skjelbred and Heckmann emphasized the need for transparency, ongoing dialogue, and thorough documentation to secure optimal financing arrangements, reaffirming Danske Bank’s commitment to growth in the buyout space.

Part 2 | INDUSTRY AND SECTOR DEEP DIVES – AND STRATEGIES FOR SUCCESS

Part 2 of the Nordic Buy Out Forum was presented by:

A Thousand and One Sector: Navigating Health Care Investing // Adina Symreng, BCG

Adina Symreng, a partner at BCG with medical background, opened her presentation by addressing the unique challenges and opportunities within the healthcare industry. Symreng emphasized that delivering real value is crucial for the sustainability of healthcare, and focuses on efficient manufacturing, rapid innovation, optimized sales strategies, enhanced outcomes, and effective care that minimizes complications. Due to the health care sector being «a thousand and one sector», Symreng shared the key trends in three subsectors within health care – MedTech, In-vitro diagnostics and HealthTech.

Despite the health care sector being a growing market, the healthcare industry is not insulated from macroeconomic forces. Symreng emphasized the importance forearly-stage companies to focus on profitable growth, demonstrating that their offerings provide tangible value to customers and the healthcare ecosystem.

Navigating in the tide; Kverva’s buy and build strategy // Torgeir Svae, Kverva

It was time for a deep dive into the seafood sector with Torgeir Svae, an investment director at Kverva – an investment company focusing on value creation through its buy-and-build strategy. Svae shared some valuable «dos» and «don’ts» based on Kverva’s experiences,attributing parts of their success to a focus on operational excellence. This approach drives the company forward with a clear and robust five-year value creation plan, potentially including M&A, financial smartness, and industrial competence. Svae also highlighted the importance of understanding not just what you own but why, capitalizing on financial market dynamics, and maintaining flexibility to align ownership strategies. After all, «seafood is a sector, not an asset,» Svae says.

Why and how the Nordic Bond market plays/can play an active role in construction financing of critical mineral providers domestically and internationally // Hans-Arne L’Orange, Clarksons Securities

Hans Arne L’Orange, Head of Metals & Mining at Clarksons Securities, focused on the Nordic bond market’s role in financing providers of critical minerals. L’Orange highlighted the historical and current funding challenges within the mining sector, emphasizing that different mining stages attract various types of investors and capital. He specifically pointed out the development stage, which faces significant challenges due to governmental mistrust, unpredictable licensing processes and frequent changes in policy and taxation. Banks largely avoid exposure to commodity sectors such as mineral extraction, which L’Orange attributes to the industry’s poor reputation. L’Orange is also critical to the ongoing greenwashing in other sectors that complicates genuine sustainability efforts for people to understand mining’s role in the energy transition. The advantages of the Nordic Bond Market were highlighted, including its rapid and cost-efficient process, educated investor base, and favorable features such as standardized documentation under Norwegian law and flexibility in issue size and terms.

The Schibsted story: a year of big bang transactions turning Schibsted from a media tech conglomerate to a pure play marketplace company // Fredrik Bjørland, Schibsted

Head of M&A and Investment Portfolio in Shibsted, Fredrik Bjørland, told the impressive «Schibsted story»; how Schibsted unlocked more than 20 years of sustained value creation in Adevinta in an excellent take-private transaction – a transaction recently awarded as the European M&A Transaction of the year in London 27 November 2024 at the Mergermarket European M&A Awards. From 2022 until 2024, Adevinta went from being a «problem» to being part of the #1 Nordic PE transaction, #2 Nordic Public to Private transaction, and #5 European PE-backed Public to Private transaction. In addition to the Adevinta-transaction, Bjørnland talked about the following divestment of News Media, that allowed Schibsted to transform into a focused marketplace company, which subsequently resulted in NOK ~63 billion of shareholder value generated over a period of 18 months. At last, Bjørnland summarized Schibsted’s focus areas going forward: simplify, verticalize and expand!

Part 3 | AI – Transforming and disrupting business landscapes

Part 3 of the Nordic Buy Out Forum was presented by:

Using AI to transform businesses // Bjørn Olstad, Microsoft

Bjørn Olstad from Microsoft delivered a compelling presentation on leveraging AI to transform businesses, marking the first of three talks of this session. He discussed the significant advancements in AI capabilities, including the processing of text, audio, and images. Olstad delved into the DotCom versus DotAI concept, highlighting the substantial challenges and barriers for startups entering the AI space, which are intensified by significant investments from major tech companies. He detailed the scaling laws of AI, pointing out that data-rich models and the exponentially growing cost-efficiency of AI are reshaping industry standards. Olstad cautioned against complacency in the rapidly evolving AI industry, and urged businesses to evaluate their future relevance by considering what will make their company more relevant in three years.

Implementing AI in Transactions: Concrete Use Cases // Maged Helmy, Newcode

Next up was the founder and CEO of the start-up company Newcode.ai, Maged Helmy, who gave some insight to the limitations and possibilities of AI. When selecting an AI vendor, Helmy provided five critical considerations, emphasizing the need for customer adaptability, transparency, ownership, stringent security and compliance, and algorithm agnosticism. He demonstrated how AI can enhance efficiency in sourcing, evaluating, and conducting due diligence on targets by speeding up processes and providing deep data reviews. By leveraging AI to automate repetitive tasks and employ smarter due diligence techniques, firms can gain a significant competitive advantage.

To conclude the AI session, Theresa Schumacher Walberg, soon-to-be partner at Wiersholm, outlined crucial legal considerations for investing in AI businesses in light of the newly implemented European Artificial Intelligence Act. Walberg emphasized the importance of avoiding investments in AI technologies that engage in prohibited practices, such as behavioral manipulation, social scoring, and unauthorized biometric categorization. She also highlighted the stringent compliance requirements for high-risk AI applications, especially those used in educational settings or critical public and private services. Additionally, Schumacher discussed the challenges of integrating compliance measures into existing technologies, stressing the necessity of embedding AI compliance from the onset of technology development. Lastly, she advised conducting comprehensive legal due diligence to ensure that the training data used in AI systems adheres to copyright, trade secrets, and privacy laws.

Part 4 I Future outlooks and geopolitics post US elections

Part 4 consisted of the following presentation:

Calm before the trade storm // Nora Szentivanyi, J.P. Morgan

Nora Szentivanyi, a Senior Global Economist at J.P. Morgan, presented an overview of the global economy post US elections and future expectations – «2024 will be remembered as a year for the super elections,» she says, referencing the over 70 elections held globally this year. Szentivanyi explains that overall, the market has responded quite positively to the recent US election, with noticeable gains in the equity market, higher yields, sustained momentum in certain sectors, and a strong dollar.

Szentivanyi outlined J.P. Morgan’s market expectation, which she referred to as the «Goldilocks» scenario. This ideal outcome involves a soft landing for the economy, where inflation decreases, central bank interests slightly drop, and both bonds and stocks benefit from the resultant increase in wealth. This would essentially be the most favorable baseline outcome. Despite the optimism, Szentivanyi emphasized numerous uncertainties as we head into 2025. She highlighted several factors, including fiscal policy, inflation and fluctuating tariffs, that could prevent the ideal “Goldilocks” scenario from happening.

Closing Remarks // Jarle Kvam, Wiersholm

See you next year on 5 December 2024. Save the date! 

Kontaktpersoner

Jarle Kvam

Partner

Christine Liæker Lindberg

Markeds- og kommunikasjonsdirektør

Publisert: 

09.12.2024

Sist oppdatert: 

15.01.2025

Relaterte artikler