AK&M notes market segments leading in M&A transactions in 1Q21

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AK&M 13 May 2021 23:19

In January-March 2020, the information technology sector (IT)  ranked first in M&A transactions in Russia with 13 transactions for a total amount of $2.77 billion, 36.5% of the total market volume and 23.8 times above the result achieved for the same period in 2020 ($116.1 million) as stated in AK&M Information Agency's Mergers & Acquisitions Market bulletin (issue 277).

The largest transaction of this period in the sector was the acquisition by Citrix Systems of the Wrike team collaboration platform from the previous owners (CEO and founder Andrey Filev and Vista Equity Partners fund) for $2.25 billion in January.

The metallurgical sector ranked second with three transactions for a total amount of $1.2 billion, more than 48 times above the previous year's result (one transaction worth $24.6 million in the first quarter of 2020). The sector accounted for 15.8% of the total M&A market volume. The largest transaction was the acquisition by TMK of its competitor Chelpipe Group from its principal shareholder Alexey Komarov. The transaction amounted to $1,112.3 million which earned it the second position in the ranking of major deals.

The retail segment ranks third with 11 events worth $1.01 billion hitting the market (up 3.8 times year-on-year). The segment accounted for 13.4% of the M&A market volume. The largest transaction was the acquisition by Mikhail Fridman's LetterOne private equity firm of the Dia Spanish supermarket chain for $847.8 million.

The construction and development sector ranked fourth with 59 transactions amounting to $996.2 million in the first quarter of 2021, which is 34.2% below the result achieved in January-March 2020. The industry accounted for 44% of the number, 13.2% of the total amount of transactions for the 3-month period. The largest transaction in the segment in the reporting period was the acquisition in February of a 100% stake in L-holding which owns a 26.3 ha plot on 2nd Irtyshsky Proezd by a company of PIK Group for an estimated $120.9 million.

The fuel and energy segment (accounting for 4.1% of the total M&A market volume) rounds out the top 5 with two deals worth $310 million in January-March. For reference, not a single M&A event hit the market in the sector in January-March 2020. The largest transaction of the reporting period was the acquisition by Vostok Oil (part of Rosneft) of a 100% stake in drilling company TaimyrBurService for $245 million.

In the first quarter of 2021, the scale of transactions decreased considerably in the mining industry and finance, previously highly M&A-active industries.

More details on the M&A market performance in January-March 2021 are available in issue 277 of AK&M Information Agency's MERGERS AND ACQUISITIONS MARKET monthly bulletin.

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