dealfolio survey of the swedish legal market, jan-sept 2015

Inaugural Survey of Activity in the Swedish Commercial Legal Services Market

Jan – Sept 2015

www.legaldealfolio.com

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Organised Insight into Lawyers’ Client Work

Executive Summary

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Legal DealFolio has carried out its inaugural survey of legal activity in the Swedish market for the first three quarters. An end of year update will be published in December 2015.

The main story has been a high deal turnover driven by factors specific to the Swedish market, which has seen, for example, IPO activity on the NASDAQ Stockholm increase by 62% for the first half of 2015 compared a fall of 35%on the London Stock Exchange for the same period (PWC IPO Watch).

Negative Interest Rates

Liquidity and Loan Growth in the Banking Sector

Krona-USD Exchange Rates

Mature Assets in Private Equity Portfolios

Solid GDP and Domestic Consumption

Favourable Conditions for Dealmaking


Favourable Macroeconomic Backdrop for Dealmaking

•  Low interest rates and banking sector loan growth in the local market and currency depreciation versus the US dollar have been supportive of dealmaking. Underlying this, upward trends in GDP, domestic consumption and industrial production indicate a solid platform for investors in Sweden. However, the global backdrop is considerable more challenging in the final few months of 2015, and this could clearly affect deal volumes.

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Swedish Business Confidence Swedish Loans to Private Sector

Swedish GDP Annual Growth Rate

Source: Trading Economics www.tradingeconomics.com www.legaldealfolio.com

Designations and Recognitions – Sweden YTD 2015

Leading Law Firms

Corporate and M&A Vinge

Capital Markets Gernandt & Danielsson

Project Finance Setterwalls

Banking and Finance Cederquist

Leading Lawyers

Corporate and M&A Anders Holmgren (Setterwalls) Johan Winnerblad (Vinge)

Equity Capital Markets Carl Westerberg (Gernandt & Danielsson)

Debt Capital Markets Mikael Borg (Gernandt & Danielsson)

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All Designations and Recognitions are based on deals closed in the period Jan – September 2015. Please use the following links for the full list of deals: Vinge - http://www.legaldealfolio.com/directory.php?lawAlpha=V&lawId=68 Gernandt & Danielsson - http://www.legaldealfolio.com/directory.php?lawAlpha=G&lawId=82 Setterwalls - http://www.legaldealfolio.com/directory.php?lawAlpha=S&lawId=81 Cederquist – http://www.legaldealfolio.com/directory.php?lawAlpha=C&lawId=80 Johan Winnerblad - http://www.legaldealfolio.com/directory_lawyer.php?lawAlpha=J&lawyerId=1177 Anders Holmgren - http://www.legaldealfolio.com/directory_lawyer.php?lawAlpha=A&lawyerId=2246 Carl Westerberg - http://www.legaldealfolio.com/directory_lawyer.php?lawAlpha=C&lawyerId=2268 Mikael Borg - http://www.legaldealfolio.com/directory_lawyer.php?lawAlpha=M&lawyerId=1353


View from the Vanguard: Mr Carl Westerberg of Gernandt & Danielsson

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DealFolio: How has the first half of 2015 compared to 2014? According to PWC’s recent IPO watch, Nasdaq Stockholm was the only major European exchange to see a year on year increase. CW: The first half of 2015 was certainly very active in terms of ECM activity and there was pick up compared to the same period in 2014. Nasdaq Stockholm even needed to have two closing bells because the activity was so high! DealFolio: Have any industry sectors in particular been driving the activity? CW: Some of the activity has been driven by private equity sellers. The activity has been fairly balanced with no particular industry sector driving the market forward. DealFolio: Obviously there is some general macro uncertainty globally, but focussing on Sweden do you see some good potential for activity in the coming quarters? CW: It is difficult to say how international issues will affect the Swedish economy and market but in terms of the second half, if market conditions permit, there are some good IPO candidates out there who would be ready.


View from the Vanguard: Mr Anders Holmgren of Setterwalls

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DealFolio: 2015 has been a very active year for Swedish M&A. What factors have driven this activity? AH: Several factors.The depreciation of the Swedish krona – 30% versus the US dollar – has meant that good quality Swedish assets represent even better value for foreign buyers. This is one factor. DealFolio: Have the record low interest rates set by the Riksbank also been a factor? AH: Yes, some loan financing terms are attractive for acquisitions. There is good liquidity out there and this has supported M&A activity. DealFolio: Have currency dynamics led to an increase in cross-border activity? AH: Historically, the Swedish market has always had a large number of transactions with a cross-borderangle. Probably around 50% of deals are cross-border, and this year was no different. DealFolio: Any observations on the nature of the cross-border activity? AH: We have seen several deals with a US component, both private equity and industrial. There have Been German acquirors on the industrial side and UK acquirors on the private equity side. There is the potentialfor more Chinese acquirors in the future.


Distinctive Legal Landscape of Sweden

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Sweden has a very distinctive high-end legal sector with a number of very respected law firms who operate independently of international multi-national law firms. The tables above show headline league tables as at 30 September 2015.


Selected YTD League Tables as at 30 September 2015

8 www.legaldealfolio.com

ECM Drivers: Real Estate and Travel & Leisure

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ECM Deals by Industry


Corporate and M&A Drivers: General Industrials and Retailers

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15

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25

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Corporate Deals by Industry


Leading Lawyers: Equity Capital Markets


Leading Lawyers: Corporate and M&A


Leading Lawyers: Real Estate


Active Sectors: General Industrials


Active Sectors: General Industrials (cont.)


Active Sectors: General Retailers


Active Sectors: Media


Active Sectors: Infrastructure Assets


Active Sectors: Selected Bank Credit Transactions


Active Sectors: Initial Public Offerings


Active Sectors: Initial Public Offerings (cont.)


Active Sectors: Corporate Bonds


Concluding Remarks

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•  YTD 2015 has been an active one in the Swedish legal market. Favourable macroeconomic conditions have supported dealmaking.

•  The sector could see less activity as global headwinds buffet markets with Chinese growth slowdown and Fed tightening weighing on investors attention.

•  Traditional heavyweights such as Gernandt & Danielsson in the Capital Markets and Vinge in the Corporate practice areas have led the way. Setterwalls, Cederquist and MAQS have also been leading in several industry sectors.

•  In our end of year report December 2015 we will undertake a detailed comparison of 2015 activity versus 2014 activity.

•  We hope you have found this survey informative – please contact us on [email protected] in case of any questions.

•  Legal DealFolio www.legaldealfolio.com is a unique resource for participants in the legal services market, powered by a structured global database of lawyer client work and commentary. Please visit us soon….

Thank you!
