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The Baltic mergers and acquisitions (M&A) market is booming and the deals are increasingly becoming truly pan-Baltic, involving targets operating in all three countries, it appears from the recent “Baltic M&A Deal Points Study 2018”. Almost 30% of the Baltic M&A deals completed in 2016-2017 involved targets operating in each of the three Baltic countries, which is almost double as much as in the period 2014-2015.
A typical Baltic M&A deal remains in the EUR 1-5 million bracket, while the number of EUR 5-10 million deals has also increased (from 18 to 27%).
The main industries of the target were IT and technology (17%), energy (13%) and services (12%) sectors, while in 2014-2015 the most active sector was construction and real estate (29%).
Nearly half of the buyers are from the Baltic countries while the importance of US investors has also increased significantly (from 2 to 10 %). Both the buyer and the seller were from Baltic countries in a third of the total amount of deals.
The study also indicates that courts are becoming a more popular choice among businesses as a dispute settlement venue, and local arbitration bodies less popular, with the exception of the Vilnius Court of Commercial Arbitration. This trend indicates that Estonian and Latvian arbitration institutions are considered unreliable by businesses. The main alternative seems to be the Arbitration Institute of the Stockholm Chamber of Commerce, but arbitration in Helsinki is also gaining popularity (growth from 2% to 8% respectively).
“Baltic M&A Deal Points Study 2018” analyses M&A transactions completed in the Baltic States during 2016-2018 and covers 91 deals in the region. The survey was put together by law firms Sorainen, Cobalt, Ellex, Everheds Sutherland, and TGS Baltic in cooperation with the Estonian, Latvian and Lithuanian Private Equity and Venture Capital Associations.