M&A remains interesting during the stock market downturn

More company owners should look at the possibility of conducting company sales in private transactions, as an alternative to going public. This is the view of Carlsquare, which has a superior network of contacts for M&A in Europe.

In Sweden, there is a strong focus on public company deals – most Swedish growth companies are targeting an IPO. But according to Marta Zientarski, Vice President at Carlsquare, company owners should also consider the possibility of selling the company in a private transaction. Not least during times when volatility in the stock market is particularly noticeable.
– Selling on the private market is a stable alternative to an IPO. There is a lot of interest in buying small and medium-sized companies, even during periods when the stock market is in decline, says Marta Zientarski.

Erik Lundberg, Partner and Head of M&A Sweden, stresses that IPOs are right for growth companies where owners want quick access to venture capital while retaining control.
– If the owner wants to get out of the company, he should definitely not go public. Through a private transaction, the whole company can be sold, or you can bring in a resourceful partner in the form of a private equity firm and sell a large share of the company. That is the big difference with an IPO,’ says Lundberg.

Superior network of contacts

Carlsquare is one of the few Swedish companies to offer advice on both tracks, as well as a so-called “dual-track”, where it works towards an IPO and a sale in a private transaction in parallel – to make decisions only in the final stage when the best option has crystallized.

With offices in Berlin, Hamburg, Munich, Stockholm, Copenhagen, London, and Paris, Carlsquare also has a network of contacts that few can match. In 2021, the company closed a total of 63 transactions with an average value of SEK 900 million.
– We had very high ambitions during 2021 based on the great pipeline we had from the start. Still, we were surprised by how many transactions we managed to close, given the situation with covid-19. But we have resolved many transactions via video meetings during the year, making us more time-efficient, says Erik Lundberg.

“No slowdown in sight”

The 63 transactions include Swedish companies Addsecure, Transcom, Altor, IK, and Viva Winegroup, which has bought German companies. Carlsquare also advised on the spin-off of Telia Carrier from Telia to Polhem Infra and Beijer Refs’ purchase of Inventor in Greece. As Marta Zientarski looks ahead to the rest of 2022, she has high hopes that this year can be just as strong.

– There is no slowdown in sight, but of course, it is impossible to say how it will develop given the world situation. However, our pipeline for 2022 looks about the same as last year, which bodes well, she says.