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04.5

Mergers & Acquisitions

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The aggregate value of exits of European tech companies via M&A exceeded $90B by the end of September 2020, on track for the strongest year since 2016.

European M&A exit value per year

Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 data is up to September 2020.

The vast majority of exits of VC-backed European tech companies are small in scale. In fact, exits via M&A that are valued at $100M or lower, including those that involve undisclosed exit valuations, account for more than 90% of total exits per year.

VC-backed M&A exit count by deal size

Legend

  • <$100M
  • >$100M
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

The top 10 largest acquisitions of VC-backed European tech companies drove an aggregate enterprise value at exit of $12.7B. The top three largest transactions all involved acquisitions of once VC-backed companies by private equity buyers. The acquisition of a majority ownership of Charlotte Tilbury, in a transaction that valued the company at more than $1.2B, by Spanish fashion and beauty giant, Puig, together with the billion-dollar acquisition of Flaschenpost by The Oetker Group, represent important milestones of older European incumbent businesses looking to Europe's VC-backed startup ecosystem for growth and innovation.

Top 10 largest VC-backed exits by value at exit in 2020

Note:
Based on data up to 31 October 2020. Charlotte Tilbury Beauty and United Wardrobe value at exit based on rumours.

The acquisitions of companies like Flaschenpost to a European buyer is in some way not unusual. European buyers actually consistently drive the largest share of exits of European tech companies by M&A, consistently accounting for around 70% or so of exits by count.

Share of M&A exits by buyer region by year

Legend

  • North America
  • Europe
  • Asia
  • Rest of World
Note:
VC-backed and non-VC-backed deals included. All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 is based on data up to September 2020.

The Flaschenpost acquisition by The Oetker Group is remarkable for other reasons. It is simply still an infrequent occurrence to see European buyers acquiring VC-backed European tech companies at such large exit values. In fact, large-ticket acquisitions have been - and continue to be - driven by buyers from the US. While North American buyers have accounted for 22% of M&A exit volume since 2016, those transactions have accounted for a disproportionate share of total exit value (45%), indicating the higher average ticket size of US-led acquisitions.

Share of M&A exits by buyer region, 2016 to 2020

Legend

  • Share of count (%)
  • Share of value (%)
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 data is up to September 2020.

The trend over time also shows that while North American buyers have accounted for a relatively steady share of M&A exit volume, they have been responsible for a growing share of total exit value over the past five years, though a few larger M&A transactions led by European buyers has shifted the dial back somewhat in 2020.

Share of exits by North American buyers

Legend

  • Share of total number of exits (%)
  • Share of total value of exits (%)
Note:
All Dealroom.co data excludes the following: biotech, secondary transactions, debt, lending capital, and grants. Please also note that the data excludes Israel. 2020 data is up to September 2020.