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Clairfield H1 2023 review: amid signs of recovery, investing in Asia and at home

Latest numbers suggest that the second quarter of 2023 improved significantly over the first quarter in terms of M&A, indicating a potential rebound and renewed investor confidence. Pipelines may have been patchy early 2023 compared to early 2022 but this has improved. Strategic buyers were especially active, with private equity accounting for 21% of deal activity compared to 26% in H1 2022 according to Refinitiv.

Our own advisory practice has not noted a decline in private equity activity, with PE involved in 43% of transactions advised by Clairfield in 2023 to date. Private equity firms continue to expand on roll ups and buy & build investment opportunities, despite challenging financing market conditions. The resilience of the US market, increased outbound Japanese interest, and activity in certain sectors suggest the potential for recovery and future growth in M&A.

Industrials and energy were two sectors where crossborder activity increased in the first half of 2023, a trend that we have noted in our own sector practice. Some of the notable deals we have closed in industrials include the acquisition by Japanese group Miura (TYO:6005) of a minority stake in Jensen-Group (EBR: JEN) in the heavy-duty laundry industry, and the sale of Italian Fonderia Boccacci (iron castings) to Consilium Private Equity. Our industrial reach was enhanced by our partnership with JF Chemicals, a strategic consulting firm specialized in the chemicals sector. Clairfield and JF are collaborating in advising clients in the chemicals and polymers industry over the full company life cycle.

In line with sector trends, the energy, cleantech & resources sector group at Clairfield has also noted an uptick in the first half of the year. Notable deals closed include the sale of NL Mab Holding BV, a Dutch charging point operator, to 50Five Group, an installation and technology company specialising in EV charging solutions backed by Engie and JP Morgan Asset management, and the acquisition by the Danish utility group OK of electricity company Elektron.

„Crossborder activity remains an area of interest as large groups forge ahead with their consolidation strategies and scout new opportunities. The rising cost of debt raises concerns primarily midmarket and smallcap companies, potentially influencing their investment decisions. The renewable energy sector, especially photovoltaic and biogas plants, continues to be an appealing target market. Additionally, the end-of-waste/recycling segment is rapidly evolving into a domain to watch, as evidenced by our recent successful deals in this field,” remarks Marino Marchi, the head of Clairfield’s energy practice group. „As we navigate through the rest of the year, the unpredictability of significant macroeconomic events makes precise projections challenging. However, I anticipate a noticeable uptick in activity compared to the previous quarter, particularly if positive signals regarding the potential stabilisation of inflation and the cost of debt materialise.”

In addition to our noteworthy deal closings, Clairfield has achieved remarkable milestones that exemplify our commitment to growth and strategic expansion. Internally, we have prioritised the empowerment of young talent through our comprehensive analyst and associate training programs, nurturing skills and attracting future talent. We also completed a major data management and digitalisation project. “On the market side, strengthening our reach in the ASEAN region has been a key focus for Clairfield, allowing us to tap into emerging opportunities and forge valuable business development opportunities together with our partners in over 12 countries in APAC,” said Alexander Klemm, executive chair of Clairfield. With 77 transactions closed in 1H 2023 with a total disclosed value of EUR 1.6 billion and an encouraging pipeline, combined with strengthening Clairfield’s team and market-facing activities, Clairfield is positioned for continued growth in the second half of the year.

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