Nordic buyouts set to return to 2007 levels

The Nordic private equity industry has seen an exceptional amount of activity in the first seven months of this year. Looking back over the past decade, data from the unquote" database Private Equity Insight shows that the first seven months of the year have, on average, represented 59% of deals for the full year.

A total of 48 buyouts were recorded for the first seven months and if this is extrapolated on the trend seen over the past decade, Nordic GPs are expected to have completed a total of 82 buyouts by the end of the year.

This would eclipse the previous three years' totals for the region, while falling just short of the 87 recorded in 2007. Worth noting is that with the same extrapolation technique for Europe as a whole, the estimated 2011 volume total would not exceed 2008, which highlights the relative strength of the recovery for the Nordic private equity industry.

In terms of value, the first seven months of the year has, on average, accounted for 57% of the year total over the past decade. Extrapolating the first seven month's €9.23bn value, according to this trend, gives a 2011 year total of €16.05bn. Again, this eclipses the values for the three previous years while falling short of 2007's €17.9bn.

Furthermore, compared to the modest jump in expected volume over the 2008 total (82 vs 73), the expected value of deals in 2011 exceeds 2008 by 260%. This can be explained by the return of large-cap deals such as Securitas Direct and Com Hem.

Although these predictions paint a positive picture, they do not take into account the reduced confidence in the global economy following recent events. This is likely to have an effect on the number of deals completed, as well as their size. With recent large-cap deals, such as the aforementioned Securitas Direct, reporting difficulties in the high-yield bond market, it may become difficult to close deals of similar size in the near future.

As ever, it remains to be seen what the full impact will be on deal activity. Projections based on historic trends suggest that 2011 will be a strong year for the region but as industry professionals return from their summer holidays, the outlook is far more uncertain than earlier in the year.

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• Topics
• Nordics
• Buyouts
• Sweden
• Norway
• Finland
• Denmark