SINGAPORE Trends and Developments Contributed by: Christy Lim, Susan Wong, Felix Lee and Clarence Kang, WongPartnership LLP
Overview of Acquisition Financing in Singapore
changes to the Enterprise Financing Scheme (EFS) – Mergers & Acquisitions, and the move- ment towards alignment of taxonomies in the environment, social and governance (ESG) space. Also worth considering is the increase in vendor financing seen in other jurisdictions, and whether this will catch on in Singapore. These trends and developments are discussed in more detail below. Private Equity and Private Credit: Leveraged Buyouts Notwithstanding the aforementioned tariff-driven uncertainty, leveraged buyouts may yet gain fur- ther traction globally in 2025. Borrower-friendly market conditions in 2024, which included improving valuations, easing interest rates and lowered inflation, have encouraged investment banks and private credit lenders to increase their involvement in sponsor financings in the lever- aged buyout space, following significant write- downs on high-risk M&A loans in the preceding years. On a global level, private debt funds have financed a record proportion of private equity- backed leveraged buyouts in over a decade, financing 77% of leveraged buyouts compared to 23% by traditional banks in 2024. Private debt is poised to maintain its dominance in the lever- aged buyout market in 2025, with private debt funds financing 83% of the 53 leveraged buyout deals announced in the first three weeks of the year. There has also been a widespread resurgence of leveraged buyout lending activity across Asia in the first quarter of 2025, one example being the ongoing discussions by Advent International, an American-based global private equity firm, for a USD300 million leveraged buyout loan to finance its acquisition of the mainland China business
2024 was a favourable year for mergers and acquisitions (M&A) with a marked increase in deal value in Singapore of 41.1% year-on-year from 2023 reaching a total of USD82 billion, with 16 M&A deals in Singapore each exceeding USD1 billion in deal value in 2024. A significant M&A deal financed by debt was the purchase of Vietnam’s biggest private healthcare group, FV Hospital, by Singapore-listed Thomson Medi- cal Group for about USD381.4million. This was the largest healthcare acquisition in South-East Asia since 2020. The generally positive M&A cli- mate has given rise to cautious optimism in the acquisition financing space heading into the first quarter of 2025. The easing of inflation in Asia and existing inter- est rate cuts by most central banks in the region in 2024 have lowered borrowing costs down from the highs of 2022 and 2023, bolstering the optimistic outlook for acquisition financing activ- ity in the year ahead. Based on the latest EY-Par- thenon CEO Outlook Survey: Global Confidence Index, 85% of Asia-Pacific CEOs who partici- pated in the survey felt that the global market outlook was promising with over 60% looking to engage in M&A, compared to less than 40% in the last quarter of 2024. That said, this optimism may be tempered by the uncertainty surrounding tariffs announced by the Trump administration from 2 April 2025 and reciprocal tariffs imposed by the US’s trading partners, which may impact Singapore as a trading hub notwithstanding the temporary pause announced by the US for most such tariffs. Recent trends and developments in the Singa- pore acquisition financing space include a rise in leveraged buyout lending, an uptick in acquisi- tion financing activity in the healthcare sector,
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