Published: February 11, 2022, Peter Rikhof
In the past six months, the average sales price of a Dutch SME business has increased again. On average, an SME business is currently being sold for 4.9 times gross profit (EBITDA), compared to 4.8 times gross profit in the first half of 2017.
This is one of the results of the Brookz Takeover Barometer, the periodic research by takeover platform Brookz on figures and trends in the takeover market. The survey was conducted among 216 merger & acquisition advisory firms (approx. 900 advisers) which together represent more than 90% of the SME takeover market (businesses with revenues between 0.5 and 25 million euros).
The highest prices are currently paid for businesses in the IT & Online sector. On average, this sector pays 6.1 times the gross profit for a business. Other sectors with high selling prices are Healthcare & Pharmaceuticals (6.0 times gross profit) and Wholesale Trade (5.65 times gross profit). Sectors with the lowest average acquisition prices are Hospitality, Tourism & Recreation (4.0 times gross profit), Automotive, Transportation & Logistics (3.75 times gross profit) and Retail (3.65 times gross profit).
The sample of 378 sales transactions showed that 39% of the transactions in the past 6 months had a deal value of less than €2.5 million. 42% had a deal value between 2.5 and 10 million euros, and 19% were in the segment above 10 million euros. Compared to the first half of 2017, the number of businesses with more than 5 million deal value increased by 8%. According to Floyd Plettenberg, partner at Brookz and responsible for the Takeover Barometer, business sales prices will continue to rise for the time being: "The number of transactions has increased by as much as 11% over the past six months. Despite this, the demand for businesses is still much greater than the supply. To 'lure' the next group of sellers out of their tent, even more will have to be paid. Fortunately, both buyers and investors still have plenty of cash on hand."
The outlook for the first half of 2018 is positive: about 90% of takeover advisory firms expect the SME takeover market to remain stable or pick up further over the next 6 months. A minority of about 10% expect the market to deteriorate. Expressed as a report grade, acquisition advisory firms give an 8.0 for the expected acquisition climate in the first half of 2018. This is the highest measured report grade since the first Takeover Barometer in early 2015.
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