Apr 19, 2016 - Note: Companies with a market cap of more than SEK 10bn have been excluded, ... announced Opera Software transaction of USD 1,365m.
Nordic Tech Landscape April, 2016
Strictly private and confidential
1
Public Market Update
2
Private Market Update
3
Underlying Factors Contributing to Nordic Success
Confidential 2
Nordic Tech Index Performance OMX Tech Index vs US Nasdaq 110
NASDAQ: 0.2% LTM 100
90
80
OMX: (15.5%) LTM
70
60 Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
OMX N Technology EUR PI
Source: Nasdaq and CapitalIQ as of 19 April, 2016
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
Nasdaq composite
Confidential 3
Nordic Tech Stocks Development Technology Stocks Development – Top 10 by Market Cap* 230 220 210 200 190 180 170
Tobii : 67% LTM
160 150 140
SimCorp: 30% LTM
130
IFS: 27% LTM1
120
Tieto: 14% LTM
110
Hexagon: 5% LTM NNIT: 5% LTM
100
F-Secure: 3% LTM Basware: (7)% LTM
90 80
Nokia: (22%) LTM Ericsson: (28%) LTM
70 60 Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Source: CapitalIQ as of 19 April, 2016; OMX Note: * Top 10 stocks by market capitalisation from the OMX tech index OMX N TECHNOLOGY EUR PI. 1. EQT acquired a 63% stake in IFS on Nov 30, 2015
Mar-16
Apr-16
Confidential 4
Nordic Public Tech Comparables Nordic Technology Comparables
Company Name
Market Cap
EV/Revenue
EV/EBITDA
(USDm)
CY16E
CY16E
Nordic Tech - Top 10 Nokia
36,072
0.9x
7.6x
Ericsson
31,767
0.9x
5.9x
Hexagon
14,938
4.6x
15.2x
Fingerprint Cards*
4,494
4.4x
11.7x
Tieto
2,085
1.2x
8.8x
SimCorp
1,627
4.8x
20.1x
Industrial and Financial Systems, IFS
1,106
NA
NA
Basware
636
3.3x
NM
Tobii
626
4.5x
NA
NNIT
623
1.4x
8.9x
F-Secure
477
2.1x
12.3x
Average
2.8x
11.3x
Median
2.7x
10.3x
Source: CapitalIQ as of 19 April, 2016 Note: * Fingerprint Cards is not a constituent in the OMX tech index.
Confidential 5
OMX Nordic Tech – Mid-Cap Largest Institutional Public Investors Top 15 Institutional Investors in Nordic Public Technology Companies (USDm)
Nordea Investment Management
369
Swedbank Robur Fonder
369
Handelsbanken Asset Management
270
Fidelity Investments
192
Novo
163
Ilmarinen Pension Insurance Co
160
Avanza Fonder
146
Sampo
133
SEB Investment Management
122
Lannebo Fonder
119
Danske Capital
113
AP Fonden
102
Investment AB Latour Investor
Alecta Pensionsförsäkring
92 86 83
Total Totalmarket marketcapitalisation capitalisationheld heldby by institutions equals USD 5.8bn institutions equals USD 5.9bn
Source: CapitalIQ as of 19 April, 2016; Holders of shares in companies listed on OMX N TECHNOLOGY EUR PI Note: Companies with a market cap of more than SEK 10bn have been excluded, EQT and Elliott Management who just own shares in IFS are excluded.
Confidential 6
1
Public Market Update
2
Private Market Update
3
Underlying Factors Contributing to Nordic Success
Confidential 7
Nordic Tech M&A Market – 2010-2016 Q1 Number of Transactions and Total Transaction Value (USDm)
10,537
7,000
40
35
6,000
30
5,000
25 4,000 20 3,000 15 2,000
10
1,000
5
0
0 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Source: CapitalIQ and GP Bullhound analysis Note: Includes transactions with disclosed transaction value and GP Bullhound advised deals; 2016 Q1 includes announced Opera Software transaction of USD 1,365m.
Confidential 8
Nordic Tech M&A Market – 2010-2016 Q1 Average LTM Revenue Multiples
Number of Transactions by Country
5.4x 4.2x
Denmark 96 18% 2016 Q1
2015 Q4
2015 Q2
2015 Q3
1.2x 1.2x
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2013 Q4
2013 Q3
Average LTM EV / Revenue
Sweden 227 41%
1.9x 1.8x
1.1x
2013 Q2
2013 Q1
2012 Q4
2012 Q3
2012 Q2
2012 Q1
2011 Q4
2011 Q3
1.6x
1.2x 1.2x 1.1x
1.0x
2011 Q2
2011 Q1
2.9x
1.7x
1.7x 1.5x
1.4x 1.4x
2010 Q4
2010 Q3
1.4x
2010 Q2
2010 Q1
1.2x
1.7x
2.9x
2.6x 2.7x
2.6x
10.9x
Finland 10,566 22%
13.3x
12.8x
11.4x
10.6x 7.7x
9.0x
9.1x
8.1x 7.5x 7.1x
9.9x
9.0x 9.0x
7.0x
Denmark 2,817 6%
Average LTM EV / EBITDA
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2013 Q4
2013 Q3
2013 Q2
2013 Q1
2012 Q4
2012 Q3
2012 Q2
2012 Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
5.4x
2010 Q2
2010 Q1
17.4x 15.0x
13.6x
6.5x
Disclosed Transaction Value by Country (USDm)
16.5x
16.2x
9.4x 9.3x
Norway 130 24%
LTM Trailing Average
Average LTM EBITDA Multiples
12.9x
Finland 94 17%
Norway 6,333 13%
Sweden 27,782 59%
LTM Trailing Average
Source: CapitalIQ and GP Bullhound analysis Note: Includes transactions with disclosed transaction value and GP Bullhound advised deals, excluding EBITDA multiples over 50.0x
Confidential 9
Nordic Tech M&A Market – 2010-2016 Q1 Number of Transactions by Acquiring Country
Disclosed Transaction Value by Acquiring Country (USDm)
Asia 19 4%
Other 672 1%
United States 55 11% Other 20 4%
Europe 4,873 11% Nordic 339 67%
Europe 73 14%
United States 25,838 57% Nordic 9,353 20% Asia 4,899 11%
Source: CapitalIQ and GP Bullhound analysis Note: Includes transactions with disclosed acquiror and transaction value
Confidential 10
Selected M&A Transactions
Sold 63% stake to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to S. Carter Enterprises
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Sold to
Point International Sold to
Sold to
Sold to
Advised by GP Bullhound
Sold to
Sold to
Confidential 11
Nordic Tech Private Placement Market – 2010-2016 Q1 Number of Transactions
Number of Transactions by Country 200 180
50
140
40
120
30
100 80
20
60
Denmark 141 17%
40
10
Sweden 393 46%
20
Number of Transactions
Finland 233 27%
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2013 Q4
2013 Q3
2013 Q2
2013 Q1
2012 Q4
2012 Q3
2012 Q2
2012 Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
0 2010 Q1
0
LTM Trailing
Transaction Value by Country (USDm)
Total Transaction Value
Norway 409 Denmark 7% 518 10%
Finland 1,112 21%
Sweden 3,362 62%
2016 Q1
2015 Q4
2015 Q3
2015 Q2
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
2013 Q4
2013 Q3
2013 Q2
2013 Q1
2012 Q4
2012 Q3
2012 Q2
2012 Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
1800 1600 1400 1200 1000 800 600 400 200 0 2010 Q1
1,000 900 800 700 600 500 400 300 200 100 0
LTM trailing
Total Transaction Value (USDm)
Transaction value
Norway 87 10%
160 LTM trailing
Number of transactions
60
LTM Trailing
Source: CapitalIQ and GP Bullhound analysis Note: Includes transactions with disclosed transaction value and GP Bullhound advised deals; Spotify’s USD 1000m convertible raise is not included.
Confidential 12
Selected Private Placement Transactions $1,000m
$55m
$67m
$11m
$30m
$24m
$74m
$526m
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Friheden Invest
Anders Holch Povlsen
$35m
$29m
$60m
$20m
$125m
$250m
$60m
$40m
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
$20m
$70m
$130m
$50m
$41m
$75m
$42m
$17m
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Private Placement
Advised by GP Bullhound
Confidential 13
1
Public Market Update
2
Private Market Update
3
Underlying Factors Contributing to Nordic Success
Confidential 14
Nordic Success Factors Of all the billion-dollar startups in the world, 10% are created by a region that has only 0.4% of the world’s population1 Government Support – Social welfare programs » Provide a strong social safety net – the downside of becoming an entrepreneur and failing is small » With free higher education, can develop the skills required for technology-related careers – Infrastructure investments / Tax incentives » Swedish government invested heavily in its technology infrastructure in 1990s, established high-speed internet and gave citizens a tax break to buy a computer Cultural Factors – The Nordics have a unique mix of strong engineering, design, and data culture going back many generations – Small population forces entrepreneurs to think globally from the start – domestic market is often not big enough – Tech-savvy early adopters – great place to test a product before going global » Mobile and smartphone penetration much higher than the global average Community – Successful entrepreneurs continue to feed the startup economy with investments of capital and experience Talent – Nordic countries are home to some of the world’s best universities – Good talent doesn’t always leave the country – Nordic countries consistently top lists ranking quality of life and happiness – Nokia’s downfall in Finland during the economic recession benefitted local startups as Nokia’s top talent, equipped with plenty of technological know-how, found positions in some of Finland’s top gaming startups Source: Creandum Nordic Exit Analysis 2015
Confidential 15
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