The acquisition market is moving back up. Four acquisition advisors on the turnover rate of businesses, the importance of meeting your projections during the sales process and the risk of early retirement. 'If you're not careful, your private banker will become your best friend yet.'
After a rough first quarter, the 2024 Dutch acquisition market has picked up steam. Stimulated by falling interest rates, on balance this led to an increase in the number of businesses sold, the latest Brookz Takeover Barometer showed. On balance, a cautious plus of two percent, but still.
Joining us at the table are four experienced acquisition advisors: Friso KuipersTranslink Corporate Finance Benelux), Bart de VolderNewtone), Edward Ooteman(ED-M & Partners) and Jan van der MaaleBBN Corporate Finance). Together they account for guiding many hundreds of purchase and sale transactions.
A slightly quiet period in the SME acquisition market doesn't make them nervous anymore. They know that the acquisition market always has ups and downs. But the volatile nature does have fewer and fewer violent outliers compared to a decade ago.
'Selling your business has become more natural,' says Van der Maale. 'It used to be that if you wanted to sell a business before age 60, it was thought that there must be something wrong with that business. Selling was seen as something negative. But today's generation of people in their thirties and forties see an exit after five or ten years as a sign of success. Those then go back to looking for a new challenge. As a result, businesses are entering the market much faster than, say, ten or fifteen years ago.'
The recent Brookz Takeover Barometer also shows that only fourteen percent of businesses currently remain owned by the same owner for more than 20 years. Do other advisers recognize this as well?
De Volder: "That picture is certainly recognizable. The category of entrepreneurs between the ages of 35 and 55 is selling their businesses at an increasingly rapid rate. And especially if they are between 40 and 50. Often they have had enough of the trick they have done and start looking for a new challenge.'
Ooteman: "I think a lot of relatively young entrepreneurs go back into business. I've done that myself. If you are in business, you don't want to end up behind the geraniums at 50 or retire for the rest of your life. You want to stay active. So many entrepreneurs start a new business again, and that business comes back to the market earlier. It's a flywheel that's only going to spin faster in the future, with so much more supply of businesses.'
Kuipers: 'Most people in your social network are still working between the ages of 40 and 55. So you can stop working, but what are you going to do all day? There's no one available to go golfing or boating with you.'
Van der Maale: 'Yes, only the people who can make money from you. Eventually then your personal trainer or - even worse - your private banker becomes your best friend.'
