Southeast Asia Deals: Singapore Secures Three of Five

Southeast Asia Deals: Singapore Secures Three of Five 

Out of the top five South-east Asia deals struck for private equity and venture capital, Singapore has successfully managed to secure three deals in the region in the first quarter. It’s considerably a notable achievement since the global pandemic has led to a slower economic activity across the world.

The multinational professional services firm, Ernst & Young Global Limited Liability Partnership stated that there have been 141 similar deals in the region in the first three months of this year. The deals altogether had a worth of US$1.4 billion (S$1.95 billion). When compared to the previous year’s list, it was 65 percent lower in value and 9 percent down in deal numbers. Meanwhile, the resale of acquired assets remained largely muted.

Despite the existing market challenges, EY’s M&A and private equity leader for Asean region, Luke Pais is hopeful that the investment activity will likely be increased by the last quarter of this year. The experts believe that the second quarter will relatively be a slow period.

Out of three South-east Asia deals, the biggest first-quarter deal in the region was that of US$706 million investment, made in the Singapore-based ride-hailing software company Grab Holdings by Krungsri Finnovate and MUFG Innovation Partners.

The remaining two deals secured by Singapore were that of US$75 and US$37 million investment in eCommerce company ShopBack and in solar energy firm Sunseap Group by separate consortiums respectively. Both were included by a Singaporean holding company Temasek Holdings. There is a high possibility that South-east Asia deals will help Singapore to recover from the losses incurred during COVID-19 lockdowns.

In the recent months, the private equity funds have majorly focused on dealing with issues such as liquidity, protecting their staff, accessing incentives etc. They are also making arrangements so that the running businesses have both the support and the resources amid the pandemic-induced crisis.

The focus is shifted to assessing new opportunities. Speaking in the same context, Pais said, “There is a high level of liquidity with the funds and as economies emerge from lockdown, corporates and entrepreneurs will need capital solutions.”

Now that the Singapore has successfully secured three of the five South-east Asia deals, the EY firm expects that the sectors of structured finance, public to private, capital recycling, non-core divestments, and sector and segment consolidation would see some sort of activity. The regular investments and range of business-supporting measures would soon mitigate the COVID-19 blow on the economy.

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