Nordic Buy Out Forum 2017

Wiersholm recently organised – for the seventh time – Nordic Buy Out Forum, an event which is also backed by the Norwegian Venture Capital & Private Equity Association (NVCA).

Initiator of the conference and partner in Wiersholm, Mr Jarle Kvam, extended a hearty welcome to a room packed full of 400-odd attendees in Radisson Blu Scandinavia in Oslo. In his introduction, he reminded his audience of the immense opportunities offered by digital transformation, technological development and artificial intelligence and the effect these factors have on the transaction market.

Mr Kvam went on to give the floor to the managing director of the NVCA, Ms Rikke Eckhoff Høvding, who gave an update on the state of affairs of the PE and VC business since last year's Nordic Buy Out Forum. Ms Høvding was able to confirm reports that private equity is continuing to generate values and is an important driving force behind innovation in Norway. She reported that in a recent survey conducted among the members of the NVCA, as much as 95% of the individuals asked were of the opinion that digitalisation would impact their company portfolio.

The initial part of the programme was dedicated to technology and investments. Mr Anders Borg, head of the Nordic activities of Kohlberg Kravis Roberts & Co., shared his insight into "disruption" from companies in KKR's own portfolio. A case in point was Välinge. This company reformed the flooring industry with its patents for click-lock laminate flooring. According to this innovative company localised in Skåne, Sweden, product development itself is not what is challenging. What is difficult, in their opinion, is knowing which problem to solve.

Mr Kjetil Gjerstad of the Boston Consulting Group gave a presentation on "the technology takeover"; that is to say the need of nearly all companies to take an active role in the technological development and to a much greater extent implement technology/digitalisation in their business, i.e. in a sense become tech companies. His three very clear pieces of advice to companies undergoing digitalisation are: Think big, start small and grow fast! Still, Mr Gjerstad stressed how simple it is to give such advice and yet how difficult it is to follow.

The young Irish company TradeIX is one of the companies in Kistefos's portfolio. Mr Richard Tynan talked about how blockchain technology can be utilised to put companies in direct contact with each other and how the resulting benefits can revolutionise a big part of the financial sector in the years ahead.

The main message of Mr Rune Opdahl of Wiersholm was that new legislation will nearly always lag behind the technological development and that "subsequent regulation with retroactive effect" creates a risk it is important to allow for in the contracts of businesses. The EU has in many areas demonstrated both the willingness and the ability to give consumer considerations a higher priority in new draft legislation. Mr Opdahl pointed to five important areas which may present surprises to many companies, both in terms of practical challenges, factors causing loss in value and actual prohibitions. For example, there will as of next year be a requirement that all automated customer processes must have a manual alternative. This means, then, that the consumer may demand to have his case processed by a person, not a robot.

The second part of the programme revolved around the state of affairs of investments in Norway and Europe, trends and prospects and factors capable of affecting the transaction market in 2018.

First off were Mr Jan Petter Collier and Mr Are Andersen of ABG Sundal Collier. The two gave an account of the geopolitical uncertainty prevalent in the markets in the last year or so. Mr Collier and Mr Andersen were of the opinion that it might be more profitable to look to listed businesses in the Nordics as potential targets, and that, therefore, there is no reason why the level of IPO activity in the Nordic region should not be high in 2018.

Based on his many years of experience, Mr Jarle Kvam talked about the role of the professional adviser and about how the actual handling of the transaction process is also a vital factor in creating added value for the client. He made reference to the fact that the roles of advisers is not entirely dissimilar to those of a football team in the sense that team play, continuous updates and coordination of information, correct instructions, active directing of communication towards agreed contact persons, and cooperation are central elements in achieving an overall positive result. Mr Kvam was joined on stage by Mr Are Andersen, who underlined the importance of project management and team work to successfully completing a transaction.

Mr John Arbuckle of BofA Merrill Lynch concluded part two by presenting the latest forecasts for the acquisition market. Just like ABG, they are of the opinion that the geopolitical uncertainty may affect this market, but that available capital and low volatility in the market indicate an increase in M&A activity in the time ahead.

Part three of the programme was forward-looking and addressed the question of whether artificial intelligence should be seen as a tool or as a threat. From their experiences in EQT, Mr Anders Misund and Mr Sven Törnkvist talked about their strategies and the digitalisation process they are undergoing in order to fulfil the potential of each company, especially by using "bid data" in following up the end customer. Mr Misund said that EQT has invested in a high-tech future by recruiting a number of individuals with tech background (people with widely differing backgrounds from the big tech companies), who complement each other extremely well. The combined experience of these individuals makes them well-equipped to succeed in their investments.

Ms Nina Olufsen of Norrøna shared her insights into what steps a long-established Norwegian retail company is taking to face the new digitalised reality and how they have invested in technology internally to acquire the necessary insight into methods which enable them to understand and meet the needs of their customers at all times. Even though the tools are getting increasingly better and the opportunities bigger, the ultimate aim is still the same: To establish a good relationship with one's customers.

The speaker to conclude the programme was bio hacker Hannes Sjöblad of Epicenter Stockholm. Mr Sjöblad has implanted a chip into his own hand to make his day easier. This chip allows him to open doors, buy train tickets and unlock codes. Mr Sjöblad has a positive view of how technology and AI can help us get to grips with problems which it takes a lot of data power to solve and which would otherwise be hard for humankind to handle; anything from environmental threats to medical challenges. He also pointed to the fact that because of a significant drop in costs, new technology will make available to more people what has so far been the privilege only of the few.

Wiersholm is proud to be the organiser of what has become an important arena for the players in the transaction market in Norway and the Nordics, and look forward to hosting the next Nordic Buy Out Forum in 2018.