EU Business News August 2017

EU BUSINESS NEWS / August 2017 5 NEWS , Carey Olsen’s Guern- sey funds team has advised global invest- ment firm Permira on the acquisition of a strategic equi- ty stake in Klarna Bank AB - one of Europe’s largest and fastest growing Fintech banks, by an in- vestment partnership advised by Permira. Klarna is currently serving 60 million consumers and 70,000 merchants providing easy-to-use payment solutions aimed at mak- ing online payments safe, simple and smooth. The company is ac- tive in 18 markets, employs more than 1500 employees and recent- ly became the largest European Fintech company to receive a banking license. The deal value and stake in Klar- na is undisclosed and it is Per- mira’s first foray into the Fintech sector. Permira, which advises funds and accounts with a total committed capital of circa € 32 billion, focus- es on identifying companies for long-term investment, combining local knowledge and global ex- pertise to help them grow sustain- ably and realise their full potential. The Carey Olsen team included partner Tom Carey, senior asso- ciate Matt Brehaut and associate Vaishali Gupta; they were respon- sible for the establishment of the investment vehicle, incorporating a new general partner vehicle and seeking appropriate regulatory exemptions. Fried, Frank, Harris, Shriver & Jacobson LLP and Nor- dic law firm Roschier provided on- shore counsel for the acquisition. Mr Carey said: “This complex transaction needed to be com- pleted within a week and we met that tight schedule delivering a high level of expertise. There is no question that Fintech is a burgeoning area of interest for investment and Carey Olsen is taking the lead in offering clear and knowledgeable advice in this sector.” For further information about Car- ey Olsen visit www.careyolsen. com or email info@careyolsen. com AR/VR : Investment in augment- ed reality and virtual reality has shot up in recent years, with most related M&A activity occurring in the US. In the last 12 months, nearly 80% of the $620+ million worth of deals in AR/VR were re- lated to hardware development. Cybersecurity : Headline grab- bing data thefts, government and corporate breaches underpin high growth in spending on cybersecu- rity driving investment and M&A activity in the sector. Deal vol- umes remain high with 80 secu- rity related acquisitions tracked in 1H 2017. Valuations maintain a healthy level as well with EV/S (i.e. revenue multiples) clocking in at 4.7x on disclosed transac- tions for the period 2015 through 1H 2017. Automotive technology : Eu- ropean investors are setting the pace in automotive technology, with 59% of automotive technol- ogy companies acquired by Euro- pean buyers compared with 37% purchased by North American investors. Digital marketing : Deal sizes in marketing application software M&A grew at the start of the year, with total transaction values for 1H 2017 up 20% to $1.7 billion versus the previous half-year pe- riod. E-commerce : The global e-commerce industry is rapidly evolving as European investors dominated another half-year peri- od of regional deal making. In the last 30 months, European buyers acquired 63% of regional targets compared to 32% of targets from North American investors. Enterprise software : Global M&A volume increased 12% in 1H 2017 versus the previous half- year period with earnings based valuation metrics (EV/EBITDA) remaining stable at 14.5x. Po- litical uncertainty in Britain had little impact on deal flow in enter- prise software as the number of UK deals grew by a modest 5% from the previous half year and accounted for 35% of all deals in Europe. Partnership on Strategic Equity Investment Financial technology : M&A deal activity in Fintech is up 8% in 1H 2017 and beginning to recov- er from its sharp drop in 2H 2016, however, still not at the levels registered from mid-2014 to mid- 2016. Within the Fintech sub-sec- tor, online financial services, val- uations are increasing as private equity purchasers focus on pur- chasing payment providers. Internet of things : Intel, Veri- zon and ARM head up the list of Top Acquirers in IoT. 198 buyers were active snapping up 239 IoT assets from 2015 through 1H 2017. While the median revenues paid on disclosed transactions has come in at 3.5x during that period, some deals were inked with EV/S ratios as high as 21x. IT services : Of the top 50 high- est valued deal during 1H 2017, more than half were cross border deals, building on from the sec- ond half of 2016 where 40% of the top 50 transactions crossed national borders. Additionally, global private equity deal flow showed a marked turnaround. There were 48 private equity deals announced in 1H 2017, doubling the number of deals pri- vate equity buyers closed during the previous six months. SaaS & Cloud : SaaS and Cloud sector picked up in 1H 2017 as deal flow in the informa- tion management and enterprise applications/networking sub sec- tors increased this year by 7%, as interest from buyout funds drove to the total value of $5.22 billion across the SaaS & Cloud sector. Hampleton’s research team pub- lishes semi-annual technology M&A market reports by sector with data on transaction multi- ples, analysis of deal drivers, and informed discussions of current trends and what to expect in the near- to mid-term future. The se- ries of reports, empowers tech- nology business owners, sellers, acquirers and investors to evalu- ate sector specific valuations, as well as timing for their own M&A activity or exit planning. The full reports are available for download at: hampletonpartners. com/research