Deal momentum post Covid-19

Welcome to the first edition of the 2021 Nordic Deal Trend Report covering the first quarter of the year. The M&A landscape across the Nordics truly witnessed a remarkable end to 2020 which also seems to spill into 2021.

After what many perceived to be an almost total deal-making standstill in the first half of last year, the number of announced deals came roaring back in the second half. Especially the fourth quarter was out of the ordinary – [544] deals are the highest number of quarterly announced transactions recorded in the period covered by this report.

The big question is now to which extent this deal-making momentum will be sustained in the year ahead of us? In the first quarter of 2021, we still see high M&A activity in our part of the world but also note that there are some out-of-the ordinary underlying deal characteristics.

One of these is the tech segment clearly cementing its position as the hottest sector in the region. Normally a top-3 sector, tech deals have soared at the start of this year, making it a clear lead and accounting for almost one third of all announced deals. This is easily explainable, though, as we have been pushed into a new, more digital, work-life environment following the pandemic. Also, no doubt, the increased use of e-commerce has had an impact on the tech role in our lives. We clearly see tech deals having a compelling angle which, without a doubt, will attract interest going forward.

And while we are looking ahead further into 2021, in particular at the broader M&A market, we see promising signs of the upbeat activity to continue. I guess the past year has taught us that nothing is certain, and growth is not a guarantee; however, we seem to have avoided a repeat of the long, slow recovery as seen after the financial crisis a little over ten years ago.

Overall, the outlook for M&A activity across the Nordics is a positive one. The first quarter of the year has had a higher number of announced deals compared to the same period last year – before the pandemic hit our region and rest of the world.

The backlog of deals that were postponed following COVID-19, new deals coming to market, continued low interest rates, the level of private equity dry powder available to be invested and, fingers crossed, vaccine rollout will, hopefully, drive economic recovery, confidence in M&A and keep the momentum up moving into the second quarter of 2021.

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