Up and above in the Nordics TMT sector
Technology, Media and Telecom (TMT) sector in the Nordics has rebounded to historic high as Private Equity sponsored investments increased significantly 2020YTD. The report is covering the latest market trends, M&A transactions and valuation environment within the Technology, Media and Telecom (TMT) sector.
- Significant M&A activity in 2020YTD in the Nordics amounting to 276 observed transactions. Private Equity sponsored transactions increasing to 39% of all recorded transactions in 2020YTD.
- Headline deals in 2020YTD include leading players: eBay Classified (incl. DBA.dk and Bilbasen.dk from Denmark) was sold to Adevinta (EU8.0bn), Addpro from Sweden and SuperOffice in Norway was sold to Axcel, Siteimprove from Denmark was sold to Nordic Capital, Unifaun from Sweden was sold to Marlin Equity, Modcam from Sweden was sold to Cisco.
- In terms of geography, deal activity is concentrated in Sweden (c. 50%), with total number of transactions on par with last year. Swedish acquirers are still the most active as cross-border buyers in the Nordics region, followed by non-Nordic acquirers from the US and the UK.
- Valuations dipped during the outbreak of corona and are now trading above the four-year long-term average across the TMT space but depend on the segment: ranging between 9.9x (for IT Services) and 16.4x (for Software) in EBITDA for public listed companies.
- The Nordics TMT indexes have seen significant turmoil due to the pandemic and despite the dip our Software index is now trading at plus 66.3% from the beginning of the year, whereas the OMX Nordics Index is up 9.8%
- We see massive opportunities in the Nordics TMT sector, now more than ever as accelerated by COVID-19, that technology shapes not only businesses but most certainly our everyday lives. We are also currently experiencing a high amount of local and international attention from investors and strategic buyers for Nordic companies across software, media and digital services.
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We see a huge increase in investor demand for tech companies as the COVID-19 pandemic has dramatically reshaped organizations' transition to a digital-first mindset and new ways of collaboration. Remote working and have spurred an increased focus on security, productivity solutions and IT services to combat new requirements of a digital landscape, furthermore to enable employees safe return to the office space.