Published: August 28, 2023
The Dutch takeover market has returned to cautious growth. In the first half of 2023, the number of sales transactions increased by 13%. The average selling price of an SME business remained almost the same at 4.65 times gross profit.
This is one of the results of the Takeover Barometer, the periodic research of takeover platforms Brookz and Dealsuite on figures and trends in the Dutch takeover market. The survey was conducted among 274 Dutch merger & acquisition advisory firms focusing on businesses with revenues between 0.5 and 30 million euros.
Now that the new reality of higher interest rates and rising inflation has slowly set in, we are seeing increased activity in the Dutch acquisition market for SME businesses again over the past six months. Compared to H2-2022, the number of sales transactions increased by 13%, with especially more smaller businesses (deal value <2.5 mln euro) and large businesses (deal value >10 mln euro) being sold.
In contrast, the share of transactions of businesses with a deal value between 2.5 - 10 mln euro fell from 30% to 24%. Average sales prices remained almost the same over the past 6 months: on average, 4.65 times the gross profit was paid for an SME business.
Rising interest rates did have a negative impact on the availability of bank financing over the past 6 months. Compared to H2-2022, the share of takeover transactions financed by a bank has now fallen from 51% to 43%.
According to Peter Rikhof, managing director of Brookz, the latter is a particularly worrisome development. 'Entrepreneurs and investors do seem to have adapted to the changing circumstances by now. And there is still plenty of money available from investors and strategic buyers. But in order to achieve a successful transaction, bank input is still an important part of the financing mix in most acquisitions.'
In line with the recovering acquisition market, the pipeline at advisory firms is also well filled and the outlook for the second half of 2023 is moderately positive. Nearly 90% of advisers surveyed indicated that the number of assignments in their portfolios remained the same or increased. Only 11% of advisers saw a decrease in the number of assignments.
In addition, a large majority of advisers surveyed (71%) are optimistic about the prospects for the next 6 months with a 7.1 rating.
| Sector | Multiple H1-2023 | Adjustment compared to H2-2022 |
|---|---|---|
| Software development | 6,8 | +0,1 |
| IT Services | 6,5 | — |
| Healthcare & Pharmacy | 6,2 | — |
| Agri & Food | 5,5 | — |
| Wholesale | 5,3 | −0,1 |
| E-commerce & Online Stores | 5,1 | −0,2 |
| Industry & Manufacturing | 4,9 | −0,1 |
| Business services | 4,9 | — |
| Media, Advertising & Communications | 4,1 | −0,1 |
| Construction & Installation Engineering | 3,9 | — |
| Automotive, Transportation & Logistics | 3,7 | — |
| Hospitality, Tourism & Recreation | 2,9 | — |
| Retail | 2,6 | −0,2 |
| Average | 4,65 | −0,05 |
Survey date: end of H1-2023. Adjustment is relative to the multiple from the H2-2022 Barometer. Average as stated in the report—the fourth consecutive half-yearly decline since the peak of 4.95. Source: Brookz Takeover Barometer H1-2023 (Issue 18).
Summary
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