Current market trends and 2018 outlook
The Dutch M&A market was very active in 2017 and showed a substantial increase in deal volume compared to 2016 in mid-market transactions. According to several surveys there were more inbound deals (foreign buyers buying or investing in Dutch companies) than outbound deals. The most active sectors in the Dutch PE/VC scene are tech, media and comms, life sciences & healthcare and financial services. It is expected that this trend will continue in 2018 and that it is going to be a busy 12 months for the market!
- Crowdfunding legislation – At the end of 2017 the Dutch Ministry of Finance launched a consultation on amendments to crowdfunding legislation that focused on crowdfunding platforms raising funding by privately-placed loans as opposed to equity crowdfunding. The consultation closed on 26 November 2017. Further, in December 2017, the Dutch Authority for Financial Markets (AFM) published recommendations on the provision of information by crowdfunding platforms to investors regarding payment arrears, debit entry and net return in their crowdfunding wallet.
- Crypto Currency / ICOs – In keeping with other jurisdictions, AFM has issued a general warning to the public alerting investors to the high risks associated with crypto currencies and ICOs. But some ICOs have been successful in the Netherlands. Our regulatory team advised on the two most notable Dutch ICOs of recent times, both of which raised over €15 million.
- MiFID2 – On 3 January 2018 the EU Directive MiFID2 entered into force. AFM notified market participants that its key areas of supervision on MiFID2 will be investor protection, cost transparency and product development.
- GDPR -The General Data Protection Regulation will enter into force on 25 May 2018, which will replace the existing legislation on data protection and which will have a significant impact on every business operating in Europe. Compliance with the new law is key, not least because of the huge fines of up to €20m or 4% of worldwide turnover that could be levied for breaches. Investors will need to ensure compliance at both fund and existing portfolio level, as well as ensuring that new targets have sufficient plans in place as a key part of their due diligence.
- AIFMD – In December 2017, AFM published its findings following a survey of a large number of Dutch private equity and venture capital fund managers. The key focus areas coming out of the survey were outsourcing, risk management and substance. AFM will continue to focus on these areas in 2018.
Key deals in 2017
Osborne Clarke Amsterdam continues to be very active in the Dutch private equity and venture capital industry. Deals in 2017 included advising:
- Sellers and management on the MBO of Calco Group to Inflexion Private Equity
- Gilde Healthcare and key management as sellers in the auction sale of ViroClinics Biosciences B.V. to Parcom Capital
- Sellers and management on the MBO of 5W to Intersaction
- Sofinnova Venture and Ysios Capital in the USD 30 million Series B Financing round of BioClin Therapeutics
- Breath Therapeutics in connection with the EUR 43.5 million Series A Financing Round by Gimv, Sofinnova Partners and Gilde Healthcare
- Connected Capital in respect of the Series A Financing Round of Omnia Retail