There are always winners and losers in a macro-economic crisis. The transport sector in Europe, the Middle East and Africa (EMEA) has proved that it has what it takes to continue to deadlift heavy M&A loads while others are complaining about sore backs and torn calluses.
Transport M&A in EMEA has now reached its all-time highest value on Dealogic record at EUR 79.5bn year-to-date, with 394 deals. By comparison, overall M&A values for EMEA have fallen by almost 11% compared to YTD 21, with 400 fewer deals this year.
More than half the value of EMEA transport M&A is due to the takeover of Italian motorway group Atlantia [BIT:ATL] for EUR 42.7bn. Its controlling shareholder Edizione and partner Blackstone [NYSE:BX] decided to take the group private in the aftermath of the tragic collapse of the Morandi bridge in 2018.
Atlantia is one of the main shareholders in Getlink [EPA:GET], the operator of the Channel Tunnel between the UK and France, with 15.5%. Infrastructure player Eiffage [EPA:FGR] recently agreed to acquire a 14% stake from TCI Fund Management. Dealspeak's friends at The Morning Flash believe Getlink could also be a take-private candidate.
Megadeals bulk up result
The presence of megadeals like Atlantia may have bulked up the value of transport M&A, but the number of deals is up too, with 29 more announced this year. Transport accounts for 9.3% of the EMEA M&A value this year – up from 4.4% at this point last year.
The shipping sub-sector is beginning to build muscle again as politicians, executives and dealmakers grapple with the energy implications of the Russian war on Ukraine. Although the EU has ambitious energy transition plans for the industry, the need to keep people warm over the winter has led to a resurgence of coal transportation, alongside more environmentally friendly products like liquified natural gas (LNG).
One shipping deal to keep an eye on is the merger of Frontline [NYSE:FRO] and Euronav [EBR:EURN], which is progressing despite opposition from major target shareholder Compagnie Maritime Belge (CMB), according to Mergermarket proprietary intelligence.
No signs of quitting
As the year draws to a close, M&A in the transport sector shows no sign of quitting. One company to watch is AVS Verkehrssicherung, a German highway-traffic safety services provider backed by Triton Partners. It has already been held for five years by its sponsor, giving it a likely to issue (LTI) score of 70.6 on Dealogic’s LTI platform. The asset is the number-one exit tipped both in the sector and for the German, Austria and Swiss (DACH) region on the platform.
The number five on the table, Nexus Vehicle with an exit score of 64.2, is already poised to see Phoenix Equity divest UK-based corporate vehicle rental platform and has appointed Houlihan Lokey as sellside adviser, according to proprietary intelligence from Mergermarket.
If the sector can stay tight and focused, we can expect another strong performance in 2023.
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