David and Goliath

01 March 2008

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As the larger European and US banks are still struggling to offload debt estimated to be worth $150bn off their books, smaller local banks which have been less affected by the credit crisis, are stepping up their game. UK and US GPs are increasingly turning to domestic banks when looking to make foreign acquisitions. These banks have a competitive advantage over their international peers in terms of local knowledge and combined with a more aggressive pricing strategy debt, their offerings are increasingly appealing to international buyout houses

Nordic banks have especially been pinpointed as being well suited to step in and finance deals that pre-crisis would not have been offered to them. For instance, Cinven turned to Danske Bank and DnB Nor to assemble the debt financing for the secondary buyout of Coor Service Management in November last year. And 3i summoned HSH Nordbank, Danske Bank and European Capital Financial Services Limited among others to finance its $395m buyout of Active Pharmaceutical Ingredients from the NYSE-listed parent group (page 34).

Thus, it seems like David is taking on Goliath in the banking world, which is good news for the GPs who want to see the wheels keep turning. And, as the asset write-downs at the major banks continues, the good times for Nordic banks look set to continue.

Yours sincerely,

Linn Ronning

Nordic Editor, unquote"

Tel: +44 20 7484 9824

linn.roenning@incisivemedia.com.