Updated: Mar 26, 2020
We are only a few weeks into the new decade and already we have seen a significant number of Swiss M&A transactions involving international buyers.
The year began with German Private Equity firm Aurelius completing its acquisition of the Distrelec and Nedis businesses from Dätwyler Group. Swiss company, Distrelec is a leading B2B distributor of electronic and technical components. Aurelius intends to establish a sustainable growth path for the two businesses. This transaction was quickly followed in mid-January with a transaction involving French mass media conglomerate Vivendi through its UK owned ticketing firm See Tickets, through whom it completed the acquisition of Switzerland's 'Starticket' from TX Group. As a result of the acquisition the acquirers' sales will be boosted to almost 30m tickets annually.
Later in January we saw the Swedish tech company Hexagon acquire Zurich-headquartered Geopraevent, a firm that provides monitoring and alarm systems for natural disasters. The buyer Hexagon employs 20,000 people across 50 countries and is therefore able to bring the strength and market position of an international group to the Geopraevent team of 20, thereby facilitating future growth. January again, witnessed further cross-border M&A activity with the Australian group WiseTech Global acquisition of Swiss business SISA Studio Informatica, a customs and freight forwarding solutions provider. SISA is a well-known market leader with deep expertise across the Swiss customs and logistics sector. This will bring local knowledge and market intelligence to WiseTech as it continues its global expansion. With WiseTech's large suite of software solutions for the logistics industry worldwide and serving more than 12,000 logistics companies across 150 countries, the acquisition will only serve to enhance SISA's local market share through the combined product portfolio. German group Bechtle AG also flexed its muscles deeper into Western Switzerland through its acquisition of Abissa Informatique SA in a move to not only enhance Bechtle's presence in the region, but also to enlarge its own expertise and broaden its offering in line with its ambition to be a single source provider of multiple services across Switzerland. Germany also featured again in the acquisition of Reinach, Basel headquartered Kemtan a supplier of raw materials for applications in coatings, printing ink, adhesives, plastics, cosmetics and pharmaceuticals by the Stockmeier Group. The German buyer sells more than 26,000 product lines to more than 30,000 customers worldwide. The acquisition creates strong cross-selling opportunities thereby strengthening the future performance of both companies across a wide range of market sectors.
The month of January finished with two other notable cross-border transactions. The 8th acquisition of the month involved yet another German buyer and similar to Vivendi's acquisition of 'Starticket' the transaction involved the ticketing services sector. CTS Eventim, headquartered in Breman acquired a majority stake in Gadget Entertainment AG and wepromote Entertainment Group Switzerland AG. CTS Eventim provides ticketing services in numerous European countries and is one of the 30th to 90th largest companies in Germany by market capitalization. There is no doubt that Gadget Entertainment and wepromote Entertainment Group will benefit from a relationship with a much larger partner making this acquisition a win-win for all concerned. The 9th acquisition in January involved US company Open Systems a secure access service edge (SASE) provider. The company acquired Swiss group Sqooba, not only enabling Open Systems to add new capabilities to its own platform, but also for Sqooba to bring the value-added services of the acquirer to its domestic customer base through its headquarters in Bern.
What does all this international activity tell us? Number one it reinforces Switzerland's position as a highly desirable market for foreign companies with international deals involving mid-market players almost dominating the January M&A landscape. Number two, these acquirers seek to acquire Swiss companies to not only develop or enter a new territory or geography utilizing local knowledge and experience, but also to enhance their product portfolios and export Swiss products and services through the acquiring company and its existing multi country distribution channels.
Notably, these transactions are not all about large companies acquiring or merging with similar size companies. This is something important to consider when searching for an acquirer. Large international groups are acquiring Swiss companies with revenues of CHF 10 million and upwards. The key elements driving such acquisitions are; access to Swiss developed technology and services, alongside combining the services and products of buyer and seller, in order to enhance the value-adds of both the acquired company and the acquiring company.
So far, February 2020 looks interesting!
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