January 31, 2023

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Ready with portfolio after the value race in tech companies – E24

IT giant Visma started the year with the acquisition of two German companies after a ten billion buyout raid last year. Acquisition top Sindre Talleraas Holen also has several companies both on and off the stock exchange.

Acquisition Searches: Sindre Talleraas Holen, Director of Acquisitions and Mergers at Visma.
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Visma is now entering the German market by purchasing two software companies, and at the same time announcing several acquisitions.

– There are dozens of companies with which we are in dialogue in Germany, says Sindre Talleraas Holen, Director of Acquisitions and Mergers.

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The parties to the transaction agreed not to come up with the acquisition price.

– Prepare the war chest

Hollen points out that the decline in the value of technology companies presents opportunities.

After zero interest rates fueled the valuation of growing companies during the pandemic years, the values ​​of many companies have fallen sharply again, as interest rates have risen.

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– One thing is that we can account for acquisitions to a greater extent, and that makes sense to customers, employees and not least the shareholders who are included in the acquisition, Hollen says.

He believes that market turmoil makes some people more open to selling.

– In the past, people sat on the fence and said “now it’s going well, maybe we’ll sell in 2025”, but you see now more and more people are starting to think that maybe it’s not that stupid to take some chips off the table after all .

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It draws lines to the pandemic years.

– In 2020 and 2021, there was growth, whatever the cost. That was the only thing that mattered. Money was poured in, especially in investment capitalinvestment capitalFinancial players who invest in early stage companies.– the environment. You almost have money thrown at you as long as you have a good PowerPoint.

– In these environments, it has been realized that this no longer works. You should already start making money. We have already seen this shift towards the end of 2021.

Visma has made several acquisitions in recent years. Last year, 42 companies with a total company value of ten billion crowns were swallowed up, according to Hollin.

Visma also sold large companies. This contributed to the fund increasing to more than NOK 15 billion at the end of the third quarter.

– We have the war chest ready, having sold custom solutions last fall, says Holn, who also notes that businesses within IT Operations sold out just before Christmas.

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Consider listed companies

In the fall, Visma bought Euronext Growth-listed House of Control, a software company that went public during a historic listing wave.

A price crash followed in the wake of the stock market boom, listings dried up and many companies were bought back into private hands.

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According to Howlin, it is “absolutely appropriate” to buy more companies from the stock exchange.

– It’s high on the agenda. We follow the market. There are many related companies, without any concrete dialogue at the moment.

Hollen says Visma’s list of potential takeover candidates includes 20,000 companies in Europe, and about 10 to 20 percent of them are real candidates.

“Developing companies with only red numbers have fallen back a lot,” he says.

– But if there is good profitability, good growth and good operations, then it will fall less.

plagued by turmoil

The stock market turmoil has also affected Visma, which has been in private ownership since it was bought off the exchange by buyout fund HG Capital in 2006.

The plan was an initial public offering, but in the fall the company backtracked, blaming the fact that “market conditions for an IPO are not particularly favorable.”

When John Fredriksen and Folketrygdfondet invested in Visma in 2021, the company was valued at NOK 165 billion.

– Does the decline in technology also mean a blow to Vysma’s values?

– I will not speculate on the value of Vismas. But we have high organic growth, and then we combine that with growth through acquisitions. Then we make good money, says Holn.

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