Positive outlook from Nordic advisors

Last week I was in Scandinavia and I had the pleasure of meeting with a number of Nordic-based M&A professionals from Denmark, Finland, Norway and Sweden. These individuals worked in all aspects of M&A, from private equity and law firms to advisory companies and investment banks. Rather pleasingly there was a consistent message coming from all of them and it was as follows: deal activity, according to these professionals on the “ground” in the Nordic Region, is appearing to gather momentum.

They talked about increased levels of activity; while many seemed to think it was still very early in the discussions for the majority of the companies they were talking to, the difference between now and earlier in the year was that earlier in the year, such discussions were not really being had.

The other consistent message was that if you presented a strong company that was looking for finance then raising finance was achievable. If the company presented was not financially strong, or did not have a strong business plane, then the market still isn’t really interested.

Raising finance for companies in deals has definitely become very clear cut with no middle ground. The Zephyr database recorded an increase in deal values for Q3 2010 compared to Q3 2009, thus reflecting what deal professionals were saying face-to-face. The improvement experienced was an increase of 15%, from €6.9bn up to just over €8bn. However, the quarter was some 9% down on Q2. Given the Nordic trend of activity pretty much shutting down over the summer period, Q3 2010 was surprisingly higher than I would have expected.

What will be very interesting to see is if Q4 2010 ends up being representative, in terms of deal values, of the sentiments coming from the advisory community. Q4 2009 saw some €17.5bn worth of deals announced, this was actually a higher figure than the same time period in Q4 2008 and Q4 2007. Given the positive sentiment in the region, there is now pressure on the Nordic advisory community to live up to such a stellar final quarter performance this year as last year.


Filed under: lending, M&A, Nordic, PE, Investors