EQT leaves hot markets behind with $15 bln pet LBO 10 Feb 2021 Instead of floating vet group IVC Evidensia, the buyout shop is selling it to its new fund, and Silver Lake. Stock valuations may be choppier when it finally lists, but the company’s rapid growth should help. Even in an IPO rush, private equity is hanging on to the best assets.
Spotify has bigger issues than slower growth 3 Feb 2021 Shares in the $60 bln Swedish music-streaming group fell after it warned a pandemic-inspired boost to subscribers and revenue may not last. More worrying for CEO Daniel Ek is that costs are still growing roughly as fast as sales. That’s out of tune with a puffed-up equity value.
Ericsson’s China gains heighten blowback risks 29 Jan 2021 The $41 bln Swedish telecoms kit maker’s prospects are soaring due to Western bans on Chinese rival Huawei. But the Middle Kingdom is also its hottest 5G equipment market. The risk of reprisals should its own government ban Huawei are increasing.
EQT puts runaway share price to good use 26 Jan 2021 The $28 bln Swedish private equity firm linked to the Wallenbergs is issuing $800 mln of equity to the founders of Exeter, an American property investor. The deal expands its U.S. presence and helps diversify away from lumpy buyouts. While risky and expensive, it may just work.
EQT’s $2.8 bln pharma bet relies on sales booster 14 Dec 2020 The Swedish buyout firm is buying manufacturer Recipharm, which handles outsourced production for drug giants like Moderna. Given the target’s already heavy borrowings, delivering a decent return for EQT’s investors will depend on ramping up revenue growth.
Buy-now-pay-later exposes regulation blind spot 8 Dec 2020 Sweden’s Klarna and Australia’s Afterpay both allow punters to buy goods and defer payment. Opinion is divided over how regulators should treat any loss on the enabling financing. Balancing innovation and stability is hard, but the rules right now aren’t clear enough.
Norway’s offices are prize in $3.4 bln bidding war 26 Nov 2020 Sweden’s Castellum launched an offer for Entra days after the Oslo-based group rebuffed a bid from real estate rival SBB. Reliable government tenants and a relatively stable economy are alluring in a sector ravaged by the pandemic. But the bidders will struggle to create value.
KPN adds Dutch fibre to Europe telco buyout buffet 12 Oct 2020 Private equity firm EQT is sizing up the Dutch phone operator, according to Bloomberg. Worth 16 bln euros including debt, it’s a major meal even before the government weighs in. Smaller operators in Europe’s bombed-out telecoms sector may make simpler and tastier treats.
Economics Nobel lauds auction half-truths 12 Oct 2020 Paul Milgrom and Robert Wilson won the prize for advancing bidding theory. Their fans see rigour and the backbone of Google’s pricing. But sceptics wonder if their formal models are any more effective than rules of thumb in radio spectrum sales or bring long-term social gains.
Nordic industrial M&A gets all passive-aggressive 29 Sep 2020 Finnish paper group Valmet has proposed a share-based merger with valve maker Neles but not yet informed its target of any terms. That’s a bit cheeky given the latter already has a decent $2 bln cash bid from Swedish engineer Alfa Laval. Valmet needs to show its hand or go away.
Klarna’s new $11 bln valuation looks a stretch 15 Sep 2020 The Swedish buy-now-pay-later startup’s new funding round means it has doubled its worth in a year. That looks reasonable relative to rival Afterpay’s market valuation. It looks less so once you use multiples that better reflect competition and regulatory risks.
Sweden’s $2 bln oat milk startup has watery moat 16 Jul 2020 Oatly, which makes the dairy substitute loved by hipsters and baristas, raised capital from Blackstone and celebrities including Oprah Winfrey. Sales reached $200 mln in 2019 and are expected to double again this year. But its lead could sour as bigger groups like Danone wade in.
Europe’s private-equity share premium is temporary 16 Jul 2020 Sweden’s EQT and Swiss Partners Group fetch price-earnings multiples way above KKR, Blackstone, Carlyle and Apollo. That’s justified by faster growth and a higher proportion of management fees, which are more predictable than carry. As the newer funds mature, that will erode.
Alfa Laval’s $2 bln Finnish deal assumes a lot 13 Jul 2020 The Swedish industrial group’s cash offer for valve maker Neles raises its exposure to carbon-heavy markets. In the absence of as-yet-unquantified synergies, the return on investment looks paltry at less than 4%. Alfa investors who hailed the purchase are taking a lot on trust.
Sweden chips away at fintech star’s foundations 13 Jul 2020 A new law by the Nordic state requires Klarna to reduce the prominence of so-called “buy now, pay later” options on e-commerce platforms. It could check a key growth area for the domestic financial group. That might be a problem if other governments decide to clip its wings too.
Scandi airline rescue is formation-flying lesson 30 Jun 2020 Sweden and Denmark are taking an equal share of the knotty $1.5 bln rescue of regional carrier SAS. If equity and debt holders agree, it’s an exception to the rule that national priorities impede cross-border bailouts. Air France-KLM’s fractious state owners should take note.
The Exchange: Pehr Gyllenhammar 23 Jun 2020 Long-time Volvo CEO Pehr Gyllenhammar was pushing radical environmental and social changes at the carmaker long before they became fashionable. One of Sweden’s most admired businessmen argues why CEOs should be paid less and how it felt to become a father again at 81.
Gilead solidifies pharma pandemic insurance premia 9 Jun 2020 The $100 bln company has an approved Covid-19 drug that the U.S. government is distributing. That helps replace maturing HIV and dwindling hep C meds, and made Gilead a takeover target. The ability to cure what ails the entire economy buffs the sector’s strong defensive nature.
Swedish virus outcomes will be hard to copy 12 May 2020 The only Western state not to enforce a lockdown has a higher death rate than Nordic peers but lower than Britain or Italy. Its economy will emerge less scarred. But that’s also because of generous welfare and the fiscal room it’s using to compensate companies for lost sales.
Corona Capital: Extended Stay, Victoria’s Secret 22 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.