Transaction Trends

Danish M&A Update – Q3 2020

Danish M&A activity is back at pre-COVID-19 level
After the slowdown in M&A activity in Q1 2020 and Q2 2020 Last twelve months number of transactions by industry in Denmark Last three years EV/EBITDA by industry in Denmark (median)
Source: Mergermarket Source: Mergermarket
following the COVID-19 outbreak, Q3 2020 exhibited a strong
rebound in deal activity. The number of completed deals has Automotive & Automotive &
22 11.9x
increased significantly compared to Q2 2020 and is above the Q3 Transportation Transportation
2019 level by c. 7%. This shows that buyers are becoming more Business & Prof. Business & Prof.
34 12.9x
Services Services
optimistic and that the M&A market is recovering from the
Consumer Consumer
previous effects of COVID-19. Products
23 Products 11.8x

Engineering & Engineering &

37 12.7x
Ind. Products Ind. Products
During the third quarter of 2020, 79 The overall number of deals in the Danish Financial Financial
13 6.2x
transactions involving Danish companies market in the LTM period Q3 2020 was Services Services
have been announced. This is 21 deals 280 compared to 348 in LTM 3Q19, Life Sciences 32 Life Sciences n.a.
more than the previous quarter and 5 which is mainly driven by COVID-19
deals more than last year’s third quarter. related slowdown in activity levels in late Power & Utilities 18 Power & Utilities 5.1x
Q1 2020 and Q2 2020.
While the domestic and outbound deals Real Estate 17 Real Estate 10.3x
remained stable since Q2 2020, there is The upward trend in M&A activity last
TMT 78 TMT 13.6x
a significant increase in inbound deals of quarter is an indicator of a market
c. 146%. recovery after the drop in deal activity Travel, Leisure & Travel, Leisure &
6 10.7x
Tourism Tourism
earlier this year caused by COVID-19.
In terms of transactions by industry, TMT
The impact of the recently increasing Note: EV/EBITDA by industry are only considering deals where target is based in Denmark.
had the highest deal activity with 23 Number of transactions by transaction type EV/EBITDA multiple is not available for Life Science due to low sample size.
number of COVID-19 cases is however Source: Mergermarket
deals compared to 17 deals last quarter. LTM
difficult to assess and the situation 120 112 400
There was further a significant increase 100
should be closely monitored going 100 91 89
in Engineering & Industrial Products 80 83 300
forward. 34 48 73 74 74 79
deals in Q3 2020 compared to last 80 29 69
27 38 25 58
60 29 28 25 21 30 200
quarter, as the number of deals
39 34 36 39 27
40 37 26 30
increased from 3 to 16. 24 25 29 32 100
20 13
16 27 27 24 28 21 20 21 19 19 18 17
Transaction Trends, published by EY Strategy and Transactions, is a 0 0
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20
quarterly publication that aims to identify trends in the Danish
386 310
transactions market. Data presented in this newsletter covers all
transactions announced and registered in Mergermarket where Domestic Inbound Outbound LTM
Danish companies have participated as either target, buyer or vendor. Note: Domestic deals refer to deals where both, target and buyer are based in Denmark. Inbound and outbound deals, on the other hand, refer to deals where a Danish target was acquired or Danish buyers acquired a
foreign target respectively.
Transaction Trends 4rd edition 2020 | 2
Chr. Hansen involved in the 2 largest deals
Target region – Danish Buyers Top announced transactions last quarter (by deal value, USDm)
Source: Mergermarket Source: Mergermarket, CVR Virk

Q3 2020 LTM Target

Ann. Date Target Vendor Buyer Deal dom. Industry Deal value*
Turnover
5% 2% 3%
0% 8% 2% 26 Sep Chr. Hansen Natural Colors A/S Chr. Hansen Holding A/S EQT Partners AB Engineering & Industrial Products USD 932.7m USD 251.1m

15% 22 Sep Jennewein Biotechnologie GmbH Jennewein Biotechnologie GmbH Chr. Hansen Holding A/S Life Sciences USD 363.8m Not disclosed

Leo Pharma A/S (portfolio of 4 Cheplapharm Arzneimittel

15% 31 Aug Leo Pharma A/S Life Sciences USD 357.7m USD 123.3m
products) GmbH

eBay Classifieds Group (Denmark

59% 57% 21 Jul
assets)
eBay Inc. Schibsted ASA TMT USD 330.0m USD 53m
20%
15% 6 Jul KGH Customs Services AB Bridgepoint Advisers Limited A.P. Moller - Maersk A/S Business & Professional Services USD 280.8m USD 95.3m

*Mergermarket definition

Denmark Europe (excl. Nordics) Asia-Pacific

On 26 September, EQT Partners AB has agreed to acquire Chr. Hansen On 21 July, Schibsted ASA has agreed to acquire the Denmark assets of eBay
Nordics (excl. Denmark) Americas Other
Natural Colors A/S, a Danish-based developer and manufacturer of natural Classifieds Group (DBA.dk and Bilbasen.dk) from eBay Inc. With the
colouring ingredients for food and beverages, from Chr. Hansen Holding A/S. acquisition Schibsted creates the largest online classifieds group in the world.
Buyer region – Danish Targets
Source: Mergermarket EQT is expected to leverage inhouse expertise to strengthen Natural Colors’ Further, the acquisition increases Schibsted’s opportunity to build next
digital infrastructure, sustainability capabilities and supply chain setup. generation marketplaces across the Nordics.
Q3 2020 LTM
On 22 September, Chr. Hansen Holding A/S has agreed to acquire Jennewein On 6 July, A.P. Moller - Maersk has agreed to acquire KGH Custom Services
7% 0% 4%
0% 8% 0% Biotechnologie GmbH, a Germany-based industrial biotechnology company (KGH), a Sweden-based specialist in trade and customs management services
that develops products in the high-growth Human Milk Oligosaccharides in Europe. The acquisition creates a solid platform for growth in customs
21% (HMOs) market. The acquisition will help Chr. Hansen to become global leader services in Europe for Maersk and expands the existing setups. Further, the
43% 19%
with a strong product portfolio in HMO. acquisition enhances Maersk’s ability to meet their customers’ end-to-end
47%
supply chain needs.
On 31 August, Cheplapharm Arzneimittel GmbH has agreed to acquire a
portfolio of 4 products from LEO Pharma A/S. The acquisition expands
Cheplapharm’s existing portfolio in a number of therapeutic areas. The
29% 22% disposal enables LEO to focus on its strategy with focus on innovative
solutions for medical dermatology.

Denmark Europe (excl. Nordics) Asia-Pacific

Nordics (excl. Denmark) Americas Other
Transaction Trends 4rd edition 2020 | 3
Deal activity in TMT remains high
Transaction type by number of transactions Transaction arena by number of transactions
Source: Mergermarket Source: Mergermarket
Domestic Inbound Outbound Public Private

Q3 2020 38% 41% 22% Q3 2020 30% 70%

LTM 37% 37% 26% LTM 33% 67%

2016 - YTD 37% 39% 24% 2017 - YTD 30% 70%

Note: Domestic deals refer to deals where both, target and buyer are based in Denmark. Inbound and outbound deals, on the other hand, refer to deals Note: Public deals refer to deals where either target, bidder or seller are public, i.e. a listed company.
where a Danish target was acquired or Danish buyers acquired a foreign target respectively.

Activity by target industry

Source: Mergermarket

Number of transactions

Target industry Last quarter LTM 2019 Avg. 2016 - 2019 LTM Trend

Automotive & Transportation 8 22 17 21

Business & Professional Services 5 34 33 40

Consumer Products 3 23 29 51

Engineering & Industrial Products 16 37 66 69

Financial Services 2 13 10 17

Life Sciences 9 32 25 25

Power & Utilities 7 18 19 15

Real Estate, Hospitality & Construction 3 17 24 21

TMT 23 78 74 79

Travel, Leisure & Tourism 3 6 13 13

Total 79 280 310 351

Note: Trend indicators refer to the comparison between the LTM vs. the avg. 2016 – 2019 number of transactions.
Transaction Trends 4rd edition 2020 | 4
The OMX C20 index exceeds pre-COVID-19 levels
New Listings at Nasdaq Copenhagen Issues by Value, Nasdaq Copenhagen Foreign exchange rates (indexed)
Source: Nasdaq Nordics Source: Capital IQ, Mergermarket Source: Capital IQ

Main market 2 1.3

Private Placement IPO
First North 1.2
SEO Spin-Off/Split-Off
0 Buyback DKK/USD
1.1

76.4 1.0
80
0.9 DKK/GBP
3 3 9 60 56.4 55.2
2 8 48.5 47.1 DKK/SEK
0.8
36.1 38.1
40
0.7
2
3 3 3 20 0.6
2 2
1
0 0 0 0.5
2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020
2013 2014 2015 2016 2017 2018 2019 2020

OMX C20 Index Avg. multiples of listed Danish companies

Source: Capital IQ Source: Capital IQ
Nasdaq Copenhagen (“CSE”) saw two new listings on First North in the third

1,400 quarter of 2020, while no new companies were listed on the main market.
37.2x
1,350
1,300 30.4x The companies listed on First North in the third quarter of 2020 are Mdundo.com
P/E
1,250 28.1x A/S (4 September) and Audientes A/S (18 September).
1,200
29.6x
1,150 The OMXC20 increased by approximately 8% during the third quarter,
1,100 subsequent to a increase of approximately 16% in Q2 2020. The index has
1,050 3.9x
Q3 2020 increased steadily during the third quarter apart from a dip in the end of July of
1,000 3.8x 2019 approximately 4%. Towards the end of the quarter the index is at a higher level
950 P/BV
4.0x 2018 than before COVID-19.
900
850 4.1x 2017
01/Jan 01/Mar 01/May 01/Jul 01/Sep

Transaction Trends 4rd edition 2020 | 5

EY supported deal of the quarter
Target Deal description Services provided by EY enabling aligned
information sharing across workstreams

► A.P. Moller - Maersk acquired KGH Customs Services, a Sweden-

KGH Custom Services based specialist in trade and customs management services in
Gothenburg, Sweden Europe Tax due
diligence
► With the acquisition, Maersk enhances its capabilities as an
integrated container logistics company, offering end-to-end
Financial due
Revenue EBITDA Change in revenue EBITDA margin supply chain solutions to its customers and a larger geographical
FY19 FY19 FY19 FY19 diligence
footprint

890 160 15.0% 18.0% ► The deal will significantly improve Maersk’s overall offering
SEKm SEKm within customs services SPA assistance

Buyer
KGH Custom Services at a glance Benefits to the client

► Seamless execution

A.P. Moller - Maersk

Copenhagen, Denmark Presence in 12 ~770 ~27,000 active
countries employees customers ► Unified response and one-point-of-contact for
client
Revenue EBITDA EBIT EBITDA margin
FY19 FY19 FY19 FY19
► Industry experts from both Denmark and
Sweden
38,890 5,712 1,725 14.7%
USDm USDm USDm SEK 890m+ in SEK 160m+ in SEK 124m+ in
revenue EBITDA EBIT ► Flexible and agile response

Transaction Trends 4rd edition 2020 | 6

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Transaction Trends 4rd edition 2020 | 7
About this publication
Transaction Trends is a quarterly publication that aims to identify trends in the Danish transactions market. Transactions covered
in this publication are public and private transactions announced by all Danish companies, defined as a transaction where either
the buyer, target or vendor company is a Denmark based company. Public transactions are defined as transactions where either
the buyer, target or vendor company is listed on a public stock exchange. All other transactions have been classified as private.
Domestic transactions are defined as transactions conducted within a national boundary, i.e. deals involving two or more
incumbent nationals, while cross border transactions involve companies from at least two different nationalities. Deal Value is
taken as the sum of the consideration paid by the acquirer for the equity stake in the target plus the value of the net debt in the
target, where applicable. Inclusion of net debt in the deal value will depend on the stake acquired or the target company type.
Transaction Statistics are based on Mergermarket and EY data. Public market data are sourced from S&P Capital IQ and Nasdaq.
Transaction Trends is published by EY Strategy and Transactions.
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CVR no. 30700228
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