Sweden’s Hexagon Shapes Up For $20 Billion Sale

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Sweden’s Hexagon Shapes Up For $20 Billion Sale

Hexagon has begun preliminary talks regarding a possible sale to a US or European rival, with The Wall Street Journal reporting that a deal could fetch the Swedish tech company a $20 billion valuation. A successful sale would cap an otherwise tumultuous year for Hexagon.

In late October, 70-year-old Melker Schörling, the company’s chairman and largest shareholder, announced that he would step down over health concerns. Then, in March, CEO Ola Rollén was charged by Norwegian police with insider trading, albeit for activities unrelated to Hexagon’s operations. Although the company has clarified that it ‘regularly evaluates various opportunities’, the WSJ has reported that both events have triggered Hexagon’s latest move.

Under Rollén, Hexagon became an M&A powerhouse, doubling down on its holdings in IT (57% of its completed acquisitions since 2010) and B2B services (43%) to fuel the former conglomerate’s metamorphosis into a profitable geospatial and industrial measurements specialist. The company has completed 30 M&A deals this decade, per the PitchBook Platform, including the acquisition of US-based engineering and geospatial software provider Intergraph for $2.125 billion in 2010.

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Here’s how Hexagon stacks up against Sweden’s top corporate acquirers since the start of 2010:

Hexagon’s acquisitive emphasis on picking up B2B companies parallels the big trend for Sweden’s corporate acquirers overall, with the space commanding the preponderance of all their M&A deals (52%) since 2010. However, Hexagon’s other preferred space, IT, has represented just 16% of M&A by Swedish corporates this decade, again per the Platform.

Hexagon generated €3.1 billion in sales and €970 million in EBITDA last year, increases of 3.5% and 6.3%, respectively, over 2015. If the company goes to a US buyer, it would continue the trend of foreign acquirers picking up European assets for increasingly eye-watering sums. Shares of Hexagon (STO: HEXA-B) gained 10.8% Wednesday.

PitchBook Platform users can check out the full data on Hexagon and corporate M&A activity in Sweden. Not a subscriber? Contact us today to set up a demo.

Article by Adam Putz, Sean Lightbown – PithcBook

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