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Nordic Capital Markets InsightsQ3 September 2017
Nordic Capital Markets Insights | September 2017 | 2
Contents
2 Welcome
3 Nordic IPO activity
5 Nordic follow-on activity
6 Nordic secondary activity
7 Nordic M&A activity
9 Feature Q&A with Thomas Feldthus, CFO at Saniona | On the road to the Main Market in Stockholm
12 Methodology
WelcomeIPO activity in the Nordics continues to rise, as Sweden leads the way with 50 out of the total 64 IPOs so far this year. Healthcare is the most active sector trending with 18 IPOs YTD, followed closely by the Technology sector with 16 IPOs. We bring you details on the following pages. In this issue, we are also happy to share with you our Q&A Feature with the CFO of Saniona, Thomas Feldthus. In the Healthcare sector, Saniona initially listed on AktieTorget in 2014, upgraded to First North Premier in 2016 and has now upgraded to the Nasdaq Main Market in Stockholm as of June 2017. They have been on quite a journey and we thank them for sharing their experience and valuable advice with our readers.
Our publication presents to you IPO activity in the Nordics as well as other listing activities such as upgrades to main markets, transfers between exchanges, spin-offs, pure listings with no capital raised, as well as follow-on and secondary offering activity. We also include M&A activity across the Nordics. Definitions for the various types of transactions can be found on our Methodology page. In an effort to present a timely report, we have found it necessary to cut off listing data as of September 15, 2017 and M&A data as of August 31, 2017. However, our report does capture anticipated IPOs, which are expected to occur by September 30, 2017. These expectations are as of September 15 2017 and are therefore subject to change. Any activity following these dates will be included in our next report, which will be as of year-end December 31 2017.
Our IPO data is cross-checked against the Nordic exchanges, and if we are unable to verify an IPO transaction, it will be reported as a listing. Once we verify that the transaction was an IPO, it will be reported and included in the YTD IPO totals in the following report. Please also keep in mind that the M&A data may not include all transactions in the Nordics due to the high number of private, undisclosed deals. Reported figures related to the various types of activities discussed are YTD unless otherwise noted.
Remember that each quarter EY publishes an insightful Global IPO Trends report, which can be found on www.ey.com/ipo, and our previous issues of the Nordic Capital Markets Insights report can be found on www.ey.com/dk/capitalmarkets.
We hope you will enjoy our Q3-2017 update highlighting the Nordic capital markets. We welcome your comments and inquiries and invite you to subscribe by emailing [email protected].
Andreas Dalhäll Nordic IPO Leader
Nordic Capital Markets Insights | September 2017 | 3
Nordic IPO activity YTD
Commentary
IPO activity continues to be quite healthy with YTD numbers in 2017 significantly exceeding 2016 numbers. Q3 YTD featured 64 IPOs in comparison to 42 IPOs for Q3 YTD 2016. Sweden continued to dominate the number of IPOs within the Nordic region during 2017, as it featured 50 out of the 64 IPOs to date. Activity in Finland during 2017 remained unchanged at five out of the 64 IPOs, with Norway increasing to 7 IPOs. Denmark thus far has accounted for two IPOs this year.
2017 so far has seen US$3.7b in capital raised by IPO activity, with roughly 61% of that capital being raised in Sweden. Finland accounted for 8% of capital and Norway roughly 31% of capital. Denmark’s IPO accounted for less than 1% of total capital raised in the Nordics. If we look comparatively at 2016 YTD, US$7.8b in capital was raised. The big difference between 2016 and 2017 YTD numbers is due to the large US$3b IPO of Dong Energy A/S (DK) that took place in Q2 2016, as well as the large US$2.4b Nets A/S (DK) transaction which took place in Q3 2016.
For YTD 2017, about 28%, or 18 of the 64 IPOs were completed on regulated markets. The remaining 72%, or 46 listings, were completed on the various multilateral trading facilities or MTFs. YTD 2017 also featured 13 upgrades from MTFs or OTC, with three Finnish, five Norwegian, and five Swedish companies successfully upgrading to the main regulated market within their respective countries.
In addition to the IPOs, we had 27 additional listings. These listings typically had capital raises prior to or after listing and are therefore not counted in the official IPO numbers. Our IPO data is cross-checked against the Nordic exchanges, and if we are unable to verify an IPO transaction, it will be reported as a listing. Once we verify that the transaction was an IPO, it will be reported and included in the YTD IPO totals in the following quarterly report. Our data now indicates that Fjord1 AS, TC Connect, and Nitro Games were IPO transactions, and these have been added to our YTD IPO totals.
Volume
64 IPOs(42 IPOs
Q3 YTD 2016)
US$3.6b(US$7.8b
Q3 YTD 2016)
Value
Breakdown of IPOs by countryDenmark Finland Norway Sweden
YTD 2017 2 IPOs 5 IPOs 7 IPOs 50 IPOs
YTD 2016 3 IPOs 3 IPOs 0 IPOs 36 IPOs
Xspray Pharma ABUS$16.4m
Aspire Global plcUS$38.8m
Seamless Distribution Systems ABUS$25.6m
Top
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Q3
2017
S&P 500 +11.68%
DK — OMXC20CAP +13.10%
FI — OMXH25 +6.48%
NO — OSEBX +10.97%
SE — OMXS30 +4.06%
YTD returns as of 15/09/2017
Equity indexes
Denmark US$13.7m
Finland US$277.6m
Norway US$1.1b
Sweden US$2.2b
Grand total US$3.6b
61% 31%
<1%
Capital raised by country
8%
Nordic Capital Markets Insights | September 2017 | 4
Regulated markets MTF
Denmark 0 2
Finland 2 3
Norway 7 0
Sweden 9 41
Total 18 46
Regulated markets include Oslo Børs, Oslo Axess, and Nasdaq Main markets.MTF stands for multilateral trading facility. First North, First North Premier, Merkur Market and AktieTorget are considered MTFs.
New listings and spin-offs since our last reportDate Country Exchange Company Activity
June Sweden Main Market Momentum Group Spin off from B&B Tools AB
June Sweden AktieTorget iApotek listing onlyJuly Sweden AktieTorget Panion listing onlyJuly Sweden AktieTorget OmniCar listing onlyJuly Sweden AktieTorget Enrad listing only
New upgrades and transfers since our last reportDate Country Exchange Company ActivityJune Sweden First North A1M Pharma transfer from AktieTorgetJune Denmark First North Erria transfer from main marketJuly Norway Oslo Børs FLEX LNG LTD upgrade to Oslo Børs from Oslo Axess August Norway Oslo Børs Fjord1 ASA upgrade to Oslo Børs from Merkur MarketAugust Norway Oslo Børs Borr Drilling Limited upgrade to Oslo Børs from Norwegian OTCSeptember Sweden Main Market Catena Media upgrade to main market from First North
IPO activity YTD
Healthcare
18 IPOs (US$856.3m)
Technology
16 IPOs(US$830.5m)
Industrials
10 IPOs(US$1.1b)
Three sectors trending
New Nordic IPOs since our last report
Month of admission
Exchange nationality Exchange Company Sector
Market value post
IPO in US$m
Proceeds in US$m
Offer price (local
currency)
% change of offer price
vs first trading
date
Effective / expected
May Norway Oslo Bors Fjord1 AS Industrials 334.8 162.4 29 13.1 Effective May Sweden First North Nitro Games Oyj High Technology 8.4 3.1 40 1.0 Effective June Sweden First North TC Connect AB Energy and Power 5.2 1.7 20 43.0 Effective June Sweden First North Surgical Science Sweden AB Healthcare 19.5 8.0 35 64.3 Effective June Denmark First North Conferize A/S High Technology 15.3 4.3 8 - Effective June Sweden First North Cimco Marine AB Industrials 32.9 4.6 14.5 23.5 Effective June Sweden First North Urb-IT AB High Technology 35.0 12.9 15 0.7 Effective July Sweden First North Aspire Global plc High Technology 156.1 38.8 30 6.7 Effective
July Sweden First NorthSeamless Distribution Systems AB High Technology 30.1 25.6 36 -5.6 Effective
September Sweden First North Xspray Pharma AB Healthcare 34.0 16.4 22 - Effective September Sweden First North SenzaGen AB Healthcare - 11.3 0 - Expected September Norway Oslo Bors SpareBank 1 Nordvest Financials - 14.5 0 - Expected
IPO
IPOs outside the NordicsZealand Pharma A/S from Denmark has listed in the United States
Cross-border activity since our last report IPOs in the Nordics Aspire Global plc from Malta Nitro Games Oyj from Finland and Realfiction Holding AB from Denmark have completed IPOs in Sweden
Nordic Capital Markets Insights | September 2017 | 5
Follow-on sector analysis of capital raised2017 Q3 YTD
Finland US$86.0m
Norway US$2.6b
Sweden US$1.0b
Grand total US$3.7b
27%
71%
2%
Capital raised by country
Nordic follow-on activity YTD
Volume
104 follow-ons(105, Q3 YTD 2016)
US$3.7b(US$4.3b, Q3 YTD 2016)
Value
Breakdown of follow-ons by countryDenmark Finland Norway Sweden
YTD 2017 0 6 70 28
YTD 2016 3 10 45 47
Top
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follo
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ns
in Q
3 20
17
CommentaryA follow-on is the issuance of stock by a company that is already publicly traded. As of our cut-off date of September 15 2017, there have been 104 follow-on transactions compared to 105 for the similar comparative period in 2016. Norway continues to lead in the follow-on market, with Norwegian companies accounting for 70 of the 104 transactions. Swedish companies accounted for 28 transactions and Finnish companies accounted for the remaining six. The transactions completed so far in 2017 had a value of US$3.7b compared to US$4.3b in the comparable period in 2016.
We believe that from time to time insights can be gained by focusing on sector trends with regards to follow-on activity. We continue to see listed companies in the Oil & Gas and Healthcare industries raise capital during the first three quarters of 2017. Companies in the Healthcare sector were also quite active based on number of transactions. When we turn our attention to capital raised, Oil & Gas, Real Estate Property, and Transportation make up the busiest sectors. Oil & Gas accounted for 39% of capital raised through follow-ons so far this year as compared to approximately 10% for the comparable period in 2016.
Sector Amount US$m Number of dealsOil & gas 1,459 23Healthcare 159 16Computers & Electronics 182 13Transportation 369 12Finance 224 11Real Estate/Property 485 7Utility & energy 273 6Other sectors 587 16
Grand Total 3,737 104
16%
7%
4%10% 5%
13%
39%
6%
Eltel ABUS$173mAxactor ABUS$75m
Insr Insurance Group ASAUS$52m
Sector Amount US$m Number of dealsHealthcare 424 28Computers & Electronics 143 19Finance 271 12Oil & Gas 422 9Real Estate/Property 1,568 8Telecommunications 134 4Transportation 316 4Other sectors 1,007 21
Grand Total 4,284 105
3%
7%
Follow-on sector analysis of capital raised 2016 Q3 YTD
3%
23%6%
10%
10%
37%
Nordic Capital Markets Insights | September 2017 | 6
Volume
41 secondaries US$7.5b
Value
Nordic secondary activity YTD
Breakdown of secondaries by countryDenmark Finland Norway Sweden
YTD 2017 7 8 6 20
YTD 2016 3 3 11 26
Ahlsell ABUS$424.8m
DONG Energy A/SUS$386.1m
Jyske Bank A/SUS$223.6m
Top
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seco
ndar
ies
in
Q3
2017
Commentary
A secondary offering is an offering of securities by an existing shareholder of a company, as opposed to the company itself. The liquidity offered to financial sponsors, founders, management teams, and major shareholders is another important feature of publicly listed companies. Financial sponsors and Private Equity (PE) houses sell for a variety of reasons, e.g. the need to return funds to investors as well as the need to fund future investments in less mature companies.
Top new shareholder reductions since our last reportIssuer name Selling shareholder Pricing date Industry Secondary
value US$m
Mr Green & Co AB Directors of the Co 14-jun-17 Finance 26.8
Castellum AB AP Fastigheter AB 20-jun-17 Real Estate/Property 190.9
AcadeMedia AB EQT Partners AB 20-jun-17 Professional Services 98.1
JM AB Oslo Bolig og Sparelag AS - OBOS 30-aug-17 Real Estate/Property 117.2
Dong Energy A/S Goldman Sachs - Merchant Banking Division 31-aug-17 Utility & Energy 386.1
Konecranes Oyj Terex Corp 05-sep-17 Machinery 223.6
Jyske Bank A/S BRFfonden A/S 06-sep-17 Finance 267.7
Ahlsell AB CVC Capital Partners Ltd 12-sep-17 Construction/Building 424.8
Tokmanni Group Oyj Nordic Capital Svenska AB 13-sep-17 Retail 81.4
Nordic Capital Markets Insights | September 2017 | 7
Cross vs same sector analysis YTD
53%
47%
Sector type Number of deals
Cross-sector deals 572
Same sector 501
Total 1,073
1,073
Nordic M&A activity YTD
Volume
1,073 Deals(931, August 2016)
US$61.8b(US$47.5b, August 2016)
Disclosed value
CommentaryThe M&A data presented is based on announced deals from January 1 through August 31, 2017. During this current period, there were 1,073 deals that featured either a Nordic acquirer or a target company, compared to 931 deals over the same period in 2016. Of the 1,073 announced deals, 978 or 91% have been completed and 95 or 9% were pending closure as of the end of August 2017.
As of August 31 2017, 501 or 47%, out of the 1,073 deals were same-sector deals. Looking deeper at same-sector deals, we find that the Technology sector accounted for 124, or 25%, Diversified Industrial Products accounted for 80, or 16%, and Consumer products and retail 54, or 11%. Same-sector deal breakdown for the same period in 2016 was quite similar with Diversified Industrial Products claiming the top spot, followed by Technology and Consumer products and retail.
As of August 31, 2017, the remaining 572, or 53%, out of the 1,073 deals were cross-sector deals. As expected, the Financial Services industry accounted for 230, or 40%, of the 572 deals. Outside of these two sectors, Diversified Industrial Products accounted for 71, or 12.4%, and Technology accounted for 52, or 9%, of the 572 cross-sector deals.
Sector Number of deals
Technology 124Diversified industrial products 80Consumer products and retail 54Real estate 51Automotive and transportation 35Media and entertainment 21Oil and gas 19Other sectors 117
Total 501
16%
4%
7%
Same sector analysis YTD
10%
25%
11%
M&A deal breakdown by countryDenmark Finland Norway Sweden Outside Nordics
Buy-side 147 111 157 444 173
Sell-side 178 148 143 364 213
4%
23%
4%
9%
Cross sector analysis, buy-side YTD
7%
40%
13%
4%
20%
501 of1,073
572 of1,073
3%
Deal range breakdown
Deal size
Number of deals
Amount US$m
Undisclosed 759 Undisclosed
0-100 US$m 263 4,318
100-500 US$m 36 7,819
501+ US$m 15 49,710
Sector Number of deals
Financial Services 230Diversified industrial products 71Technology 52Consumer products and retail 42Telecommunications 24Real estate 20Automotive and transportation 19Other sectors 114
Total 572
Nordic Capital Markets Insights | September 2017 | 8
Top 10 M&A Nordic deals since our last report
Announcement date Target Acquirer
Deal value US$m
Deal status
Target country
Acquirer country Acquirer sector Deal technique
15-jun-17 Essity AB Existing Shareholders
26,666 Completed Sweden Sweden Consumer products and retail
Spin-off, Divestment
21-aug-17 Maersk Olie og Gas A/S Total SA 7,402 Pending Denmark France Oil and gas Divestment, Stock swap
15-aug-17 Songa Offshore SE TransOcean Ltd 3,380 Pending Norway United States Oil and gas Public offer, Stock swap
28-jun-17 Visma AS (40.04%) GIC Pte Ltd, Montagu Private Equity LLP, Intermediate Capital Group plc, HgCapital LLP
1,799 Completed Norway Singapore Financial Services Divestment
20-jul-17 Bambora Group AB Ingenico Group SA
1,734 Pending Sweden France Diversified industrial products
Divestment
10-jul-17 Sapa AS (50%) Norsk Hydro ASA 1,627 Pending Norway Norway Mining and metals Divestment19-jun-17 Lemminkainen Oyj YIT Oyj 863 Pending Finland Finland Real estate Public offer, Stock
swap02-jun-17 Sandvik AB (Sandvik
Process Systems)Fam AB 577 Pending Sweden Sweden Financial Services Divestment,
Acquisition of Assets20-jun-17 Etraveli Holding AB CVC Capital
Partners Ltd 566 Pending Sweden Sweden Financial Services Divestment,
Leveraged buyout17-jul-17 Bayerngas Norge AS Centrica plc
(European E&P business)
445 Pending Norway United Kingdom
Power and utilities Joint venture, Divestment
Includes M&A activity within the Nordic Region.
CommentaryTotal disclosed deal value as of August 31 2017 was US$61.8b compared to US$47.5b for the same period in 2016. Deal values were boosted in 2017 by the giant Essity AB spinoff, which totaled to US$26.6b. This deal was the result of SCA splitting itself into two companies. SCA continued to exist as the forest products company, and the hygiene and health division was named Essity. Shares in Essity were then spun off to existing shareholders and listed on Nasdaq Stockholm.
Excluding this spin off, the largest M&A transaction was the sale of Maersk Olie og Gas A/S to Total SA for US$7.4b. The Danish shipping group AP Moller-Maersk has indicated that they would like to focus on their core transport and logistics businesses, and the sale marks what is likely to be the first step.
As of August 31 2017, 71% of the deals were private, undisclosed deals, compared to 74% for the same period in 2016. 25% of the deals as of August 31 2017 were within the US$ 0-100m range compared to 19% as of August 31 2016. Private equity has picked up during the year, but was still less active for this current period. PE was involved in about 15% or 159 out of the 1,073 deals as of August 31 2017 compared to about 18% or 116 out of the 931 deals as of August 31 2016.
Below, we provide a Nordic M&A buyer analysis, which looks at Danish, Finnish, Norwegian and Swedish acquirers. The graphic breaks down both the number of deals, as well as the location of the targets. From the data, we can see an increase in Norwegian activity, as well as a greater appetite amongst Swedish and Norwegian companies for completing cross border Nordic deals.
B2B 85%
M&A PE involvement
PE 15%
Secondary buy-out 2%
Sell-side 3%
Buy-side 10%
B2B 914
Buy-side 109
Secondary buy-out 18
Sell-side 32 PE deals 159
Nordic M&A buyer analysis
Country of buyer Denmark Finland Norway Sweden
Number of deals 147 111 157 444
Deals within same country 100 76 76 232
Deals with other Nordic countries 22 11 45 57
Deals with countries outside of Nordics 25 24 36 155
DK FI NO SE
68%
10%
48% 52%
15%
29% 13%
17% 22% 23% 35%
68%
Nordic Capital Markets Insights | September 2017 | 9
FEATURE Q&A WITH THOMAS FELDTHUS, CFO AT SANIONA
Thomas Feldthus, Saniona
On the road to the Main Market in Stockholm
For this issue of the Nordic Capital Market Insights Report, Daniela Mercado and Emil Jensen from the Copenhagen office sat down with Saniona’s co-founder and CFO, Thomas Feldthus to discuss with him the exciting journey that Saniona has been through, with multiple upgrades starting from its listing on AktieTorget in 2014, First North Premier in 2016 and Nasdaq Main Market in June 2017.
It seems like an exciting ride that Saniona has been on since your first listing on AktieTorget in 2014. Did you plan all along to take the listing onto Nasdaq Main Market in steps?
We were considering various issues at the time of listing in 2014. First, AktieTorget is focused on early stage companies and is a bit less expensive than First North. Their homepage is easy to navigate for investors and it can function as a full IR site for startups. We felt that Nasdaq’s homepage was in some ways designed for large companies in the US and Europe, who have their own communication and IR departments. Second, we thought that we could quickly establish ourselves among the top 5-10 companies on AktieTorget thereby being a leader from the start. If we went to Nasdaq from the start, we could drown in the crowd of companies. However, we acknowledged that AktieTorget in 2014 was completely unknown territory among potential Danish investors, and probably seen as junior to First North among Swedish investors. The first was, of course, an issue. The latter could also be seen as an opportunity, since we in this way could show progress when moving to First North and later the Main Market as you describe.
There is, however, one important thing that companies need to take into consideration if they are aiming for the Main Market. Nasdaq Stockholm requires that the CEO, the CFO, or the person responsible for Investor Relations has at least one year of experience within the last five years from a similar job in a company listed on a regulated market or First North Premier. AktieTorget does not provide this qualification since Nasdaq is not monitoring companies on this list, but First North does.
And, I have to ask, why Sweden?
I am a co-founder of Saniona, and I did not receive any salary in the first years since we did not have much money. Therefore, I took a part time job as CFO for a Swedish company to secure my private obligations. The company was listed on AktieTorget, and here I learned that the Swedish market was completely different from the Danish market and any other financial market for that matter. I think that about 30% of Swedish households are investing directly in listed companies. As opposed to fund managers, who need to focus on large companies, private individuals can easily invest in small companies. In fact, many prefer to do so since the business
Company fact box
SectorLeading Biotech in the field of ion-channels
Established2011
ObjectiveDevelop and provide medicine for central nervous systems diseases, autoimmune diseases and metabolic diseases
ListedSwedish Main Market
YTD-return, as of 13 September 201721.95%
Number of employees as of 31 December 201626
Nordic Capital Markets Insights | September 2017 | 10
case is easy to understand and they often get the opportunity to meet the management in person. This results in a lively microcap market with several hundred listed companies.
The company, which I previously worked for in Sweden, experienced a very fast development in the share price and market cap increasing by 20-fold within a very short time. Based on this experience, we decided to list Saniona. Therefore, we became the first Danish company to list on AktieTorget. I think that our success inspired many other Danish companies to list on the various exchanges in the following years.
What steps did you take in preparing for your Main Market listing that you believe were the most challenging? The most valuable?
I think that the process can be divided into the following five steps:1. Accounting: We started by changing our reporting from
Swedish GAAP to IFRS2. Gap analysis: We had an IPO readiness analysis performed and
received a report. Such report tells you what you are missing and what needs to be revised in order to satisfy the listing requirements.
3. Connecting the dots: Based on the gap analysis, we started to fill in the gaps. I think that there are about 20 procedures and policies, which need to be drafted, revised and implemented before you can start the due diligence with the exchange auditors. Further, the following procedures and policies must be included: “Instruktion och arbetsordning for valberedningen,” Rules of procedure for the board, Rules of procedure for the audit committee, Rules of procedure for the remuneration committee, Instruction for the managing director, Instruction for financial reporting, Information policy, Insider policy, Instruction for insider list, Code of conduct for employees, Remuneration policy for management, Dividend policy, Risk policy, Finance policy, Finance manual, Transfer pricing policy, IT policy, and Crisis management plan. On top of
this, you need to be sure that the board and management fulfil the requirements for listing.
4. Formal due diligence: Nasdaq Stockholm appoints an exchange auditor from one of the Big 5. The exchange auditor makes a detailed audit of the company, the financial reports, its corporate governance function, the listing prospectus, etc. We also will need to have legal and tax due diligence reports performed as part of the exchange auditor’s work. The process ends with three due diligence reports, which are forwarded to the Nasdaq listing committee.
5. Prospectus and listing: In parallel to the above, you are preparing a listing prospectus. You may in that context also make a public offering. We did not make any public offering in connection with the listing on the Main Market since we were already listed on a micro exchange. However, we made a small private placement just prior to the listing.
It is a very thorough and time-consuming process with many players involved and many balls up in the air at the same time. What advice would you give to other CFOs contemplating a listing on the Main Market in Sweden?
• Assume at least a year. We were ready after one and a half, but had to wait for another six months before we could list.
• Expect delays. Do not communicate detailed and aggressive timelines to the public.
• Establish an audit committee and include a board member who has detailed knowledge and experience about the process.
• Ensure that you have a good lawyer, who has detailed knowledge about the jurisdiction you are going to list in. Swedish lawyers in Sweden, Danish lawyers in Denmark, US lawyers in the US.
• Perform a gap analysis with one of the Big 5 audit houses.• Do not reinvent the wheel. Use consultants for drafting and
implementing some of the governance procedures.
Nordic Capital Markets Insights | September 2017 | 11
That is really good on-point advice. I think companies sometimes underestimate the gaps and the time that it takes to fill them in. We also usually advise at least 12-18 months to get ready, as an IPO is a company transformation, and it takes a while to permeate the organization. What were some of your key challenges in managing investor relations and preparing for an IPO?
We took the first step into to the public arena with our listing on AktieTorget. One of our board members has a background within communication and IR in both Sweden and Denmark. Therefore, I quickly got access to a network for homepage development, IR and Swedish translation, etc.
Until now, IR primarily addressed the retail sector due to the micro exchange status. With the new status on the Main Market, we will focus more on the institutional sector, including the US, where we will use specialized IR firms.
How do you think your “life as listed” will change? Do you anticipate any new challenges?
We have been listed for some time now. The Main Market listing means that we will need to communicate at different levels. The institutional sector has different expectations than the retail sector. Generalists have different expectations than specialists, etc.
While most would see an IPO as a destination, we believe that it is just the beginning, as in many ways it accelerates growth and perhaps speeds up the velocity at which a newly-listed company creates value at that certain phase of its lifecycle. Your interim report for the first half of 2017 was just released and you have achieved an important milestone in reaching Phase 3 with your partner in Mexico, which is expected to create value for your investors. Things seem to be moving fast after only five years in operation… How do you see the next five years?
I expect that the next five years will be even faster. Our first product may potentially come on the market within the next three
years. We may not be a PE company over night, but it is a major step for a Biotech company to commercialize its first product and thereby secure stable income. I have significant hopes for Tesomet, which will be in late stage development. It can be a game changer for Saniona during the period. Already, we have a broad pipeline, which, to a large extent, is financed by partners. This will, by itself, provide momentum when these programs advance into the clinics. Then we also have potential new things coming up.
There has been a lot of talk about disruptors in different industries. Do you anticipate any disruptors in your business?
Absolutely.
The pharmaceutical industry is very large. The market for each indication is often above US$ 5 billion and may as such be considered an industry on its own. Within each indication, companies are developing ground-breaking therapies which may become blockbusters and essentially take over the market within a few years. This has happened several times in the past and it will happen again. Therefore, the pharmaceutical business is very dynamic. It has inherited elements, which will be considered disruptive in other industries.
On a broader scale, we have over the past 50 years seen the introduction of new technologies, which have changed our industry forever such as gene sequencing and genetic engineering. Most recently, we saw BMS’s introduction of an immune therapeutic in melanoma cancer, where 20 % of the patients were cured from this deadly disease. Following this initial success, the industry has, within a few years, initiated more that 1,000 new pharmaceutical programs based on similar concepts. This is a completely new way of thinking in this field.
You are absolutely right. These are exciting and innovative times for the life sciences industry and biotech in particular. We thank you for your time today and your valuable advice to other CFOs. Best of luck as you continue your journey!
Nordic Capital Markets Insights | September 2017 | 12
Methodology
Nordic regionFor purposes of the commentary in this report, the Nordic region includes Denmark, Finland, Norway and Sweden.
What constitutes an IPO?Not all new admissions to the various exchanges covered are defined as IPOs for the purpose of this report. Our definition excludes secondary offerings, readmissions, transfers between markets, and listings where no capital is being raised, or shares placed with new investors. While not considered an IPO, this activity is covered separately in our publication.
Nordic IPO dataFor Denmark and Finland, we present IPOs listed on the Nasdaq OMX Nordic First North and Main Market exchanges. For Norway, we present IPOs listed on the Merkur Market, Oslo Børs, and Oslo Axess exchanges. For Sweden, we present IPOs listed on the Nasdaq OMX Nordic First North (including First North Premier) and Main Market exchanges, as well as IPOs listed on the AktieTorget exchange.
Our data is presented as of a certain cut-off date in order to allow processing of the data in time for the planned release date. Therefore, not all activity is reflected in the infographics if the activity occurred in the days after our cut-off. If a listing is not included in the current report, it will be captured in our next report, which will present year-to-date activity.
Nordic IPO data is based on data compiled for the Global IPO Trends Reports, as provided by a third-party data source. Our IPO data is cross checked against the Nordic exchanges, and if we are unable to verify an IPO transaction, it will be reported as a listing. Once we verify that the transaction was an IPO, it will be reported and included in the YTD IPO totals in the following quarterly report. Similar to the global IPO data, the Nordic data excludes non-operating companies such as trusts, investment funds, and special purpose acquisition companies (SPACs). The IPO totals presented are year-to-date and are continually updated and therefore subject to change.
Nordic follow-on dataFollow-on transactions include capital raises for companies already listed on an exchange. Nordic follow-on data is compiled by a third-party provider and is continually updated and therefore subject to change. Follow-on totals presented are year-to-date.
Nordic secondary dataSecondary offerings are offerings of securities by an existing shareholder of a listed company. Nordic secondary data is compiled by a third-party provider and is continually updated and therefore subject to change. Secondary totals are presented year-to-date.
Nordic M&A dataNordic M&A data is compiled by a third-party provider and is continually updated and therefore subject to change. Also, the data is not all-inclusive given the high number of private, undisclosed deals. The totals presented are year-to-date and include transactions for deals that feature either an acquirer or a target from Denmark, Finland, Norway or Sweden.
CurrencyAll figures are presented in U.S. dollars (US$) in order to facilitate comparison amongst the Nordic countries.
DisclaimerThe views reflected in the
commentary and features of this publication are not an endorsement
of any party, company, business, etc. but are the views of the author and do not necessarily reflect the views of the global EY organization or its
member firms.
EY’s IPO services have helped more companies grow from private to public than any other organization.
How well rehearsed are you for the public stage?
Sweden
Andreas DalhällIPO Leader Nordics and Sweden [email protected]+46 8 52059879
Johan RoempkeExecutive [email protected]+46 31 637720
Nordics
Claus KronbakIPO Leader [email protected]+45 2529 3444
Päivi Pakarinen IPO Leader Finland [email protected]+358 40 754 8419
Thomas Embretsen IPO Leader [email protected]+47 24 00 20 59
ContactsHow EY can help
7
IPO planning IPO execution Post IPO
• For any company considering an IPO on a Nordic or international stock exchange, it is critical to map out the IPO value journey.
• As a first step towards effective IPO planning, we recommend undertaking an IPO readiness diagnostic to identify key gaps across the entire business when compared to best practice and stock exchange requirements.
• A key output of the IPO readiness diagnostic is a detailed roadmap of activities to address identified gaps, actioned with the assistance by EY professionals and other specialist advisors.
• Effective IPO planning and execution will increase your chances of a successful IPO transaction, can help improve your business and can save time and costs during the IPO journey.
IPO services• IPO readiness diagnostic
Includes various follow-up services to help address the IPO readiness gaps identified.
• IPO execution services Depend on listing destination, including: financial due diligence, working capital report, feasibility studies, valuation services, financial positions and prospects, MD&A section of prospectus drafting, comfort letters and project management services. Also IFRS conversion assistance and Financial Statements Close Process optimization.
EY has a dedicated Nordic IPO team that has experience in successfully providing IPO services across key exchanges in the Nordics and internationally.
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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