While Nordics dealmakers’ days in the holiday sun may be over, the bright spells are set to continue as they return to work thanks to an M&A pipeline expected to raise the temperature moving into the autumn.

The market is still in a seasonal lull, with some parts of the region yet to see their children return to school. But announcements of several highly anticipated deals over the summer should deliver a healthy gust of wind to dealmakers’ sails.

These include Finnish software provider Accountor, which Vitruvian Partners sold to KKR [NYSE:KKR]; Roima Intelligence, which Intera Partners agreed to sell to Corten Capital; and Finnish utility Fortum’s [HEL:FORTUM] sale of its recycling and wastebusiness to Summa Equity for EUR 800m.

Investors may not be blown away by this year’s M&A numbers, but data appears promising for a decent year, nonetheless. In the year to date (YTD), EUR 50bn has changed hands across 1,285 assets, up from EUR 35.5bn over 1,477 assets in the same period last year, according to Mergermarket data (correct at 12 August).

Denmark, Sweden are leadings lights

In terms of individual Nordics countries, Denmark ranks as the most active in the year to date (YTD), with 41.8% of the total volume spent there, followed by Sweden (29.36%), Norway (15.74%), Finland (11.45%), and Iceland (0.79%). The remaining 0.86% has been spent on targets in the US (three transactions) and Greenland (one).

Note, though, that Denmark’s volume owes much to domestic holding and investment company Novo Holdings’ EUR 10.2bn acquisition of New York, US-based provider of development solutions and drug delivery technologies, Catalent [NYSE:CTLT].

The Danish pipeline of deals to come includes NCT Offshore, which has mandated Atrium Partners to guide a partial sale of the sub-sea service company for the offshore wind industry.

By contrast, the Finnish and Norwegian markets have been left in the shade, with subdued deal activity in the two countries. This is the case particularly in Finland, where dark clouds have been gathering amid fiscal woes including rising taxes and prices, and public spending cuts – none of which does little to warm dealmakers’ confidence.

Defence coming in from cold

Technology continues to spark deal flow in the Nordics, and several assets have recently appeared on the radar.

These include AddSecure, for which sponsor Castik Capital has picked Arma Partners and Raymond James to oversee a potential sale of the Swedish Internet of Things (IoT) connectivity business; and Vitruvian Partners-backed software firm Benify, which is to come to market via sellside adviser Deutsche Bank.

One sector whose star might soon be rising in the Nordics M&A sky is the defence segment. With only one or two deals per year since 2018, and no disclosed deal value apart from one transaction in 2022 (EUR 6.18m), the sector has almost been non-existent in the region’s M&A activity in recent years.

The only Nordic defence deal in the YTD is Bridgepoint Development Capital IV fund’s acquisition of Danish anti-drone systems producer MyDefence, announced in June, for an undisclosed sum.

Per-Olov Bergström, Managing Director and Head of Nordics Region at Rothschild & Co, thinks brighter days for the defence and adjacent segments could soon be here, with Finland and Sweden’s recent NATO memberships expected to enhance deal flow.

“Saab [STO:SAAB-B] and others are benefitting from NATO and the current conflicts in Ukraine and Palestine. There is likely to be a bigger market for defence-related products such as surveillance systems and IT solutions in both Sweden and Finland,” he says.

As the sun sets on this summer, the forecast for the Nordics region includes some fine days of dealmaking ahead, with a few cold showers here and there.