Published: February 10, 2022, Peter Rikhof
More transactions, a larger order book and a positive outlook for the rest of 2015. These are the main findings of the Brookz Takeover Barometer, the periodic survey by takeover platform Brookz, on figures and trends in the takeover market.
The survey was conducted among 122 merger & acquisition advisory firms (460 advisers) representing more than 75g percent of the SME acquisition market (businesses with revenues between 0.5 to 25 million euros). Of these, over 35% of the firms participated in the survey this time.
In the first quarter of 2015, respondents supervised 128 buy transactions and 136 sell transactions. More than half of these transactions took place in the industries of Business Services (20%), Wholesale and Retail (17%) and Industry and Manufacturing (16%).
In addition, the pipeline was well filled in the first quarter. Compared to the previous quarter (Q4-2014), 60% of advisory firms saw a significant increase in the number of assignments. In fact, 19% of the advisory firms experienced an increase in the number of assignments of more than 25%. Only 5% of acquisition consulting firms saw a decrease in the number of assignments in Q1-2015 compared to Q4-2014.
Disclosing transaction prices is sensitive in the SME sector. In order to have an indication of the price development, we asked the acquisition advisory firms for their insights on the level and changes of the multiples, the factor by which the EBITDA of a business is multiplied to arrive at the transaction price. The average applied multiple across all industries is 4.6. The average multiple used by industry ranges between 3.7 and 5.7. A large majority of advisory firms (58%) indicated that the multiples paid in Q1-2015 were similar to a year earlier (Q1-2014).
The outlook for the acquisition market for the remainder of 2015 is positive. Over three-quarters of acquisition advisory firms (77%) expect the acquisition market to continue to pick up over the next six months. About a quarter of advisers expect the acquisition market to remain unchanged over the next 6 months. None of the respondents expect the acquisition market to deteriorate over the next 6 months. Expressed as a report grade, acquisition advisory firms give the acquisition climate in the first quarter of 2015 an average of 6.4. For the expected acquisition climate in the next 6 months, respondents give an average report grade of 7.3.
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