Director, Patricia Vicente, recently attended the Mergermarket Private Equity and M&A Forum in Madrid, Spain. An annual event that gathers stakeholders across the Iberian M&A and Private Equity market to hear industry leaders participate in interactive panel discussions, and network with others in the dealmaking community. Here are her key reflections from the event:

General Market Conditions

Although 2023 was a challenging year, the Spanish economy has shown some resilience, attracting substantial international interest including in the Tech space.  However, many transactions took longer to close and were harder to execute, due to increased due diligence requirements and the introduction of more complex earnouts to bridge valuation gaps.

Private equity activity was impacted by general market conditions.  Yet, there were some significant transactions that took place including JEGI CLARITY advising on the Bridgepoint investment in Samy Alliance, that accelerated the company’s growth as a social-first integrated digital marketing company.

As those at the event concluded, there has been a positive shift in sentiment recently, with the Technology, Media and Telecommunications (TMT) market buoyant in the first half of the year. Internet, Software and IT services ranked as the second most active sector based on the number of transactions in the first month of this year. 

There is optimism after the European Central Bank (ECB) reduced interest rates, from 4% to 3.75%, fostering a positive market outlook.  Combined with transactions such as Cinven’s sale of agritech company Planasa to Germany’s EW Group, with a reported valuation of around EUR 900m, there are clear signals of market momentum.

Source: Mergermarket

Healthy Pipelines

Key plenaries and stakeholders agreed that transaction pipelines appear robust, with the expectations that the valuation gap will narrow. Despite last year’s challenges, high quality assets that traded last year held their value well.

Future activity will require innovation

Attendees acknowledged that future activity would require innovation and flexibility from buyers, with bidders utilizing alternative finance tools and seeking ways to cover liability where the seller is not willing to assume it. Debt is also making a comeback, including more diverse funding sources and creative solutions. There was also optimism about a resurgence in initial public offering (IPOs).

If you would like to speak to us about the Iberian or EMEA markets, please contact Patricia Vicente directly.