Prepared by Clairfield partner Nordhaven QUARTERLY SOFTWARE REPORT INSIDE: ▪ Key observations for Q4 2020: “COVID? – What COVID?” ▪ Nordic software transactions ▪ Selected software transactions multiples for the last 12 months ▪ Trading multiples for selected international and Nordic software companies ▪ List of identified Nordic software transactions Q4 2020
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Prepared byClairfield partner Nordhaven
QUARTERLY SOFTWARE REPORTINSIDE:
▪ Key observations for Q4 2020: “COVID? – What COVID?”
▪ Nordic software transactions
▪ Selected software transactions multiples for the last 12 months
▪ Trading multiples for selected international and Nordic software companies
▪ List of identified Nordic software transactions Q4 2020
NORDHAVEN QUARTERLY SOFTWARE REPORT
Q4 2020
“Covid? – What Covid?”
2
KEY OBSERVATIONS Q4 2020
IDENTIFIED # OF NORDIC SOFTWARE TRANSACTIONS
28
23
29
20
24
36
24
19
29
24
21
37
Q12018
Q42018
Q22018
Q42019
Q12019
Q32018
Q22019
Q32019
Q12020
Q22020
Q32020
Q42020
EV / SALES INTERNATIONAL LISTED SOFTWARE COMPANIES1
6.7x 6.7x6.3x
5.7x6.3x
7.3x
6.0x6.3x
4.8x
6.4x
7.5x7.2x
Q12019
Q12018
Q22018
Q32018
Q42018
Q32019
Q42019
Q22019
Q12020
Q22020
Q32020
Q42020
Q1 2018 – Q4 2020
INCLUSION CRITERIA
Announced transactions where a Norwegian, Swedish, Finnish, Icelandic or Danish-based software
company has been sold during the quarter. The company sold must have the majority of its operations
in either of these countries. Consultancies, IT-services and resellers are not included. Neither are media
and gaming software with significant content creation. Minority transactions or transactions that does
not create a "change-of-control" situation have also been excluded. Mergermarket is our primary
source for identifying eligible transactions. Transactions below 5 MUSD have not been included.
37transactions
in Q4 2020
7.2xEV / SALES1
1Median based on selection of international software companies (appendix 2).
Source: Mergermarket, FactSet (January 14, 2021) and Nordhaven analysis.
▪ Nordhaven has identified 37 software transactions in Q4 2020 and 111 for the whole year. That is
a new record year measured in deal volume in the Nordic software space since we started
counting. The surge of IPOs underlines this. In Q4, 9 software IPOs were conducted successfully
on Euronext Growth Oslo alone.
▪ While most of the financial markets have recovered from the Covid-pandemic, the SW sector has
proven to be not only resilient but outperformed more or less all other sectors in the industry.
▪ We expect the strong interest in the recurring nature of software and tech enabled services
revenues to continue, and also expect high M&A activity going forward. Not only from investors
hunting the unicorn, but also due to various subsectors experience increased in-market
consolidation as no-one wants to be the platform left behind when the train has left the station.
3
37 TRANSACTIONS IDENTIFIED IN THE NORDIC SOFTWARE SPACE IN Q4 2020, WITH A TOTAL OF 111 TRANSACTIONS IN 2020
Source: Mergermarket and Nordhaven analysis.
▪ Nordhaven has identified 37 Nordic software transactions in Q4 2020, which
represents 33% of all transactions identified in 2020.
▪ PEs remain particularly active in this space with 54% of the transaction volume in
2020. If we also view Visma’s 7 acquisitions as PE add-on, this percentage is 60% of
the volume in 2020.
▪ Norway accounts for 31% of the Nordic transactions in 2020, representing the highest
annual Norwegian share observed in the period 2014-2020. Swedish targets
accounted for 32% of the volume, that’s in line with the average Swedish share in the
same period.
▪ Both US PE and trade buyers remain active in the Nordic market representing 16% of
the volume in Q4 vs. 19% for the whole year, down from 27% in 2019. We believe
lock-down periods in Q2 and Q4 explains the lower US activity in 2020.
DEALS BY ACQUISITION TYPE
DEALS BY TARGET’S COUNTRY DEALS BY ACQUIRER’S REGION
11
Sweden
7
2
Denmark
13
4
Norway
Iceland
Finland
36
Sweden
34
Norway
24
Denmark
14
Finland 3
Iceland
25Nordics
6
Rest of Europe
US / Canada
5
1
Rest of World
65
Nordics
Rest of World
US / Canada
21
17
8
Rest of Europe
Trade Buyer22
PE - Add-on
PE - Platform
10
5
24
36
51
Trade BuyerPE - Platform
PE - Add-on
Q4 2020 FY 2020
Q4 2020 FY 2020Q4 2020 FY 2020
4
BREAKDOWN OF DEALS BY EXIT TYPE BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION QUARTERLY NUMBER OF TRANSACTIONS
26%
55%
29%
25%
20%
29%
Q4
2018
Q2
2019
Q1
2019
48%
21%
38% 31%
22%
42%
Q3
2019
42%
Q4
2019
36%
27%38%
17%
46%59%
42%
32%
21%
Q1
2020
29%
42%
Q2
2020
33%
38%
Q3
2020
14%
Q4
2020
PE - Add-on Trade buyerPE - Platform
25%13%
11%
20%
0%
Q1
2019
25%
25%
Q4
2018
5%17%
10%5%5%
Q4
2020
8%
25%
Q2
2020
24%
17%
36%
25%
Q1
2020
0%
19%38%
0%
38%
8% 4%
Q2
2019
Q3
2019
37%
11%
30%
47%
29%
33%28%38%
29%
Q4
2019
4%
41%
11%
33%
14%
28%
0%
29%
0%
Q3
2020
35%
21%
Sweden IcelandFinlandDenmark Norway
38%
Q3
2019
40%
40%
32%
42%
20% 17%
13%
0%
63%
Q4
2018
4%
29%
0%4%
Q4
2019
8%
Q1
2019
56%
25%
17%14%
Q4
2020
6% 3%
10%
Q2
2019
13%
58%
11%
54%55%
21%
14%
Q3
2020
10%
Q1
2020
16%
Q2
2020
52%
24%
14%
68%
14%
Rest of WorldRest of EuropeNordics US / Canada
20
24
36
24
19
29
2421
37
Q4
2019
Q1
2019
Q4
2018
Q2
2019
Q1
2020
Q3
2019
Q2
2020
Q3
2020
Q4
2020
Source: Mergermarket and Nordhaven analysis.
NORDIC SOFTWARE TRANSACTIONS
Quarter-by-Quarter development Q4 2018 - Q4 2020
5 Source: Mergermarket and Nordhaven analysis.
NORDIC SOFTWARE TRANSACTIONS
Year-by-Year development 2014 - 2020
BREAKDOWN OF DEALS BY EXIT TYPE BREAKDOWN OF DEALS BY TARGET’S COUNTRY
BREAKDOWN OF DEALS BY ACQUIROR’S REGION NUMBER OF TRANSACTIONS
67% 60%51% 48% 55%
39% 46%
24%25%
24% 35% 30%
35%32%
9% 16%25% 17% 15%
26% 22%
20162014 201820172015 2019 2020
PE - Add-on PE - Platform Trade buyer
2014
17%
2020
30%
23%
30%
30%
31%23%26%
34%
0%14%
2015
30%
33%
23%
2%20%0%
2016
29%
42%
18%
18%
20%22%
25%
13%3%
0%
2017
13%
27%
2018
13%
28%
1%
2019
32%
3%
29%
Sweden Denmark Norway IcelandFinland
41%59%
30%
19%6%
29%
24%
2020
5%
2014
16%
3%
62%
2015
54%
16%
23%
49%
2016
15%
2019
13%18%
7%7%
2017
55%
26%
3%
2018
53%
27% 19%
15%
8%
Rest of EuropeNordics Rest of WorldUS / Canada
11 16 1215
20 14 24
18 13 14
20
23 26 19
23 2934
24
23 2440
23 3024
2634
3036
103
2017
3
2014
0 0
20162015
0 2
2018
80
1
2019
3
2020
88
77
95100
111
IcelandSweden Denmark Norway Finland
6
Denmark-based provider of software solutions for
property & casualty insurers as well as Life and
Pension, Health, and several innovative extension
modules
Sweden-based developer of software that supports the
client's wifi network and other IOT services
Sweden-based SaaS company that develops and
markets a cloud-based academic scheduling and
planning tool
Norway-based developer of AI-assisted design and
construction simulation software for the property
development sector
10
9
5
4
26
TARGET ACQUIRORREVENUE 2019 (mEUR) SELLER
Norway- and Sweden-based provider of public
procurement information and monitoring software
Source: Mergermarket, FactSet, Valu8 and Nordhaven analysis.
Norway-based IT company offering cloud-based
solutions
SELECTED TRANSACTIONS DURING Q4 2020– See appendix 1 for full selection
Norway-based e-health company engaged in
developing of cloud-based electronic patient record
systems (EPR) for general practitioners, specialists and
public health centres
Visma Commerce
(AB and AS)
N/A
N/A
Private
& others
Private
Private
7
5.7x
3.1x
2.3x
5.2x
Q3 2020
Q3 2020
Q2 2020
Q4 2020
Q1 2020
Q4 2020
6.8x
4.3x
TARGET ACQUIROREXIT MULTIPLE (EV/SALES)1
Finland-based company that develops and provides cost
accounting and production management software
1Backward looking multiples (last fiscal year).
Source: Mergermarket, FactSet, Valu8 and Nordhaven analysis.
DISCLAIMER: No part of this report may be reproduced without the written permission of Clairfield International. The information herein has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy or completeness. Much of theinformation contained in this report is subject to variation due to changes in market conditions, legislation or regulatory matters and Clairfield International does not undertake to notify any recipient of the report of changes to the information contained herein. This reportis not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. Additional supporting information is available upon request. Contact: Press office, Clairfield International, Tel: +41 22 518 0242, [email protected]
11 Rue du Conseil-Général1205 Geneva, Switzerland
CLAIRFIELD INTERNATIONAL SA:
www.clairfield.com
6SECTOR TEAMS OF SPECIALIZED
EXPERTISE BACKED BY
80% OF OUR MANDATES
ARE INTERNATIONAL
Top 20IN WORLDWIDE
MIDMARKET RANKINGS
Top 10IN EUROPEAN
MIDMARKET RANKINGS
Leading independentM&A advisor formidmarket deals
Clairfield International was founded in 2004 by four EuropeanM&A boutiques and has since expanded to encompass allmajor economies worldwide with the addition ofknowledgeable partners in key markets.
Our strengths are our entrepreneurial spirit, local expertise,industry know-how, and close bonds among all team membersspanning the globe.