The strong Nordic M&A market within software and IT services continued in Q1

Cyber security products and services to move from ‘bolt-on’ status to the heart of core operations

Publisert: 7. mai 2021

This quarters market trend is cyber security where we argue that cyber security sits where IT once did: as a bolt-on, not fully integrated into organisations. However, as we’ve seen with IT, this can change, and we expect that cyber-security becomes “something that you can’t opt out of. Investors are increasingly considering cyber security measures and systems when evaluating whether to invest in a company or not. A key evaluation is whether cyber security is addresses in a holistic manner rather than on top a company’s services or products.

A total number of 62 software and 19 IT services deals were announced in the Nordic market in Q1-21

The Deloitte Global and Nordic SaaS index traded at approximately 14x next twelve month revenues at the end of Q1, 6x above the 5-year average and outperforming the broader market over the last 5 years with a return of 6x. The Nordic software transactions concluded at a median EV/Sales multiple of ~5x for the last twelve months per 31/3 with a 32% growth in deal volume in the Nordics compared to Q1-20. HG’s acquisition of Trackunit in Denmark and Ferd’s acquisition of Norkart were two high profiled transactions in Q1. Visma continues to execute its M&A strategy across the Nordics and was the most active acquirer within the software segment with 3 acquisitions in Q1

The Deloitte IT services index traded at approx. 10x next twelve month EBITDA at the end of Q1, 1.2x above the 5-year average and has returned ~1.9x over the last 5 years, slightly outperforming the Nasdaq index and solidly outperforming the MSCI Nordic index. Transaction multiples with available price information in the Nordic IT services market concluded at a median EV/EBITDA multiple of ~8.5x for the last twelve months per 31/3 with a 36% growth in deal volume in the Nordics compared to Q1-20. Visolit, Nordlo and Funn continued to acquire during the first quarter, adding services, capacity and/or geographies to their existing offering. HG portfolio company IT Relation, also continues its expansion by agreeing to acquire the Swedish company Emineo in Q1.

About Deloitte M&A sector report

Deloitte M&A sector report for software and IT services covers Norway and the Nordics. This publication will be followed by quarterly updates covering recent transaction data and analysis, and specific industry trends.