2024 review
Success stories in 2024
Overview
The second half of 2024 saw stronger market activity globally. Easing inflation and interest rates reductions created a more favourable environment for M&A, buy-outs, venture investments, IPOs, and secondary fundraisings. Specifically, the following were the key success stories we observed:
- The valuation gap narrowed, simplifying negotiations, and attracting more investors.
- Bank financing eased, leading to larger deals coming back into the picture and a resurgence in leveraged buy-outs; private credit was able to plug gaps.
- There was strong competition for good targets and more foreign investment available and interested overseas investors.
- Readily available and abundant dry powder was deployed after a period of wait and see, revitalising the PE market and helping to improve in the VC market.
- Positive drivers for dealmaking included digitisation, AI developments, ESG considerations, market consolidation and the energy transition.
- There was a good deal flow of smaller deals in the absence of the largest transactions, but also average deal sizes increased, with more larger deals initiated compared to the previous year.
- A quick recovery in the earlier months of the year in some jurisdictions such as France, bringing dealmaking levels back to pre-Covid-19 levels.
- The PE secondary buy-out market strengthened, and continuation vehicles continued to be popular as alternatives to traditional exits.
- PE and VC exits while remaining below prior levels, began, in the latter part of the year, to feature more regularly.
- In the UK, a change of government initially boosted market confidence, though the October Budget tempered this a little with an increase to employer's national insurance and other costs to businesses and individuals. There was a flurry of deals ahead of the October Budget in anticipation of changes to capital gains tax rates on share sales. Capital taxes were increased in the Budget, though less than some expected.
- In Germany, the business for mid-market transactions was stronger (in particular in Q4) than initially anticipated at the beginning of 2024, often driven by strategic and financial investors using the opportunity of a consolidating market in certain industries or a modestly growing market in other industries (see the “Sectors” section).
- Amid US-China tensions, Singapore and other south-east Asian countries became top destinations for companies diversifying supply chains through a "China plus one" strategy.
- Secondary fundraising kept the ECM markets alive.
- Certain sectors performed well, as detailed in the "Sectors" section.
Deal highlights
The Netherlands
We advised Mpac Group plc, the AIM quoted global leader in high-speed packaging and automation solutions, on the conditional acquisition of Elstar International B.V., a leading provider of design, manufacturing and installation services for end-of-line automation and palletising solutions, which operates under the name CSi Palletising.
United Kingdom
We advised Focus Group, one of the UK’s leading providers of essential business technology to SMEs, on its significant investment from Hg, a leading investor in European and transatlantic software and services businesses. This partnership will support Focus Group's continued growth in the UK.
Belgium
We advised UK-based private equity fund Kester Capital, whose more recent fund closed at £200m, on its bolt-on acquisition of AxTalis, a Belgian consulting company providing Regulatory, Market Access & Medical Affairs advisory services.
Italy
We advised Autotorino S.p.A., an Italian automotive dealer present in Lombardy, Piedmont, Emilia-Romagna, Veneto and Friuli-Venezia Giulia, in the signing of an agreement for the acquisition of the entire share capital in Mercedes-Benz Warszawa sp. z o.o., a company of the Mercedes-Benz Group incorporated under Polish law and based in Warsaw, which operates a Mercedes-Benz sales outlet in the Polish capital.
Poland
We advised Skadden, Arps, Slate, Meagher & Flom LLP, who acted for I Squared Capital Advisors (UK) LLP in relation to the acquisition of Arriva plc and its subsidiaries. Arriva plc and its subsidiaries provide transport services, i.e. rail and bus across Europe, including in Poland, and its current parent company is Deutsche Bahn AG. Osborne Clarke Poland's role included carrying out a legal due diligence review in relation to the aforementioned acquisition. This transaction was a great opportunity for our office, especially because Arriva plc and its subsidiaries will be added to I Squared Capital Advisors (UK) LLP’s growing list of European investments, which include the UK power generating companies Conrad Energy and Aggreko, and contribute to its $37bn (£30.5bn) in total assets.
Singapore
We advised NSG Bio, Singapore's largest provider of biotech co-working laboratory and office space, on its partnerships with Enterprise Singapore (Enterprise SG), the Singapore government agency championing enterprise development, and Merck, a leading science and technology company, to bolster the biotech landscape by providing needed resources such as funding, expertise and networks to advance startup research and development (R&D).
Germany and Spain
We advised multinational group Infosys in the acquisition of 100% of the German technology group specialising in software development, testing and validation, in-Tech Holding GmbH, with subsidiaries in the UK, India, Romania, the Czech Republic, Austria, China, Spain, Mexico and the USA.
Sectors
Our survey demonstrated that Tech, Media and Communications (TMC), including telecoms, artificial intelligence (AI) and data was again a stellar sector for transactional work in 2024. Life Sciences and Healthcare, Financial Services and Energy and Energy Transition, in particular renewables, also performed strongly. Some jurisdictions also saw strong performance in the Defence sector.
In the Built Environment sector, real estate M&A struggled, but there were signs of a recovery, and also alternative real estate assets such as storage creating a flow of deals.
Which sectors have we seen at Osborne Clarke performing well or less well in 2024?
Belgium
We have seen a clear divide between Life Sciences/biotech fundraising (higher investment amounts, more activity) and non-Life Sciences/biotech sector fundraising and within that last category a clear divide between AI fundraisings (higher investment amounts, more activity) and non-AI related fundraisings, albeit that some investors have now less fear of missing out regarding AI investments than a couple of months ago.
Investments in AI have surged and a vibrant AI ecosystem is developing in Flanders (most notably around Ghent and Antwerp) and, towards the end of the year Life Sciences and biotech have been strong.
France
In France, the top-performing sectors have included TMC, driven by increasing digitalisation and innovations in AI and cybersecurity, Life Sciences and Healthcare, motivated by advances in biotechnology and pharmaceuticals and Defence, where geopolitical factors have spurred activity and valuations, although regulatory constraints have limited the number of players.
Germany
The sectors that saw our greatest activity in Germany were TMC (including AI and data) and Financial Services (including fintech). There were also several Mobility deals involving car dealers. OEMs are struggling and the market is experiencing a period of consolidation. These deals also involved some cross-border work. Interestingly, we saw less Life Sciences (biotech) deals this year than expected.
India
The TMC sector (IT services) has done well, with more sophisticated work such as global capacity centres, payroll, insurance and claim processing, etc., moving to India. The Logistics sector has also performed well with international players setting up operations in India, and manufacturing/industrials, consumer goods, pharma, and defence have also had a good year.
Italy
The TMC sector has performed well. We have also undertaken a number of deals in the Mobility (automotive) sector (manufacturer/dealer side); we had a line of business consisting of transactions between East Asia electric car manufacturers and Italian retailers.
Poland
In Poland, the Energy and Energy Transition (renewables) sector has performed well. The Life Sciences and Healthcare sector has also shown strong transactional activity, driven by acquisitions in clinical trials and biopharma. Deals in the Built Environment sector involving alternative real estate assets like self-storage have increased despite the more general trend of a subdued real estate M&A market. Technology-related transactions, especially those tied to energy transition like electromobility and AI, have continue to attract substantial private equity investments; there has been a noticeable focus on companies that are enabling digital and environmental transformation across all these sectors.
Singapore
AI has featured in a number of deals, including multi-jurisdictional joint ventures, as well as within our other service lines.
Spain
Energy and Energy Transition (renewables). Life Sciences and TMC have all shown dynamism.
Sweden
TMC and Energy and Energy Transition have been buoyant this year, but in the Built Environment sector, real estate M&A has not had a good year.
The Netherlands
The TMC, Life Sciences and Healthcare and Energy and Energy Transition (renewables) sectors have performed well in both M&A and VC.
United Kingdom
The sectors that have performed well are TMC (AI) and Life Sciences and Healthcare (particularly in venture deals), Retail and consumer M&A has also had a strong year, including some quasi-distressed transactions.
Corporate Real Estate deals are starting to bounce back, as are energy transactions.
We regularly see transformative deals in digitalisation, decarbonisation or urban dynamics areas. We have seen large deals in the telecommunications sector and also a regular stream of digital entertainment transactions of note.