You want to sell your contracting company? Then it's good to know what the takeover market in the field of contracting companies looks like.
In recent years, the number of consolidations in the industry has been subject to ups and downs, and 2023 saw a big drop in acquisitions compared to previous years.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In the construction and installation technology sector, to which a contracting company belongs, an indicative EBITDA multiple range of 3.7 to 4.7 is currently used, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
Do the calculation
Do you want to buy a business or sell a business in the Construction & Installation Technology sector? With this Brookz Sector Monitor, we want to present buyers and sellers with facts, figures and a look ahead that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in Construction & Installation Technology. Because in any buying or selling process, thorough preparation provides peace of mind, overview and structure.
Download report
In figures, the number of contracting companies in 2024 looked as follows(CBS):
With this online training from Brookz you are optimally prepared to largely sell your business yourself: 25 Powerpoint videos, a comprehensive valuation report, legal model contracts, handy templates, checklists and expert support. Plus 50% discount on listing your business on Brookz!
To Brookz Academy
A number of trends and developments will inevitably cause changes in the coming years, but also offer contracting companies many growth and acquisition opportunities:
There is quite a bit going on in the construction industry around nitrogen and PFAS measures. This is a big bummer for the industry, as construction cannot be built as fast. However, sustainability initiatives are getting extra attention, which is a positive flow within the construction industry. According to the United Nations, construction is responsible for 38% of CO2 emissions.
According to Rabobank, large players in the construction industry may be running into limits, but there is plenty of work for small contractors. Consumers will see plenty of home and garden remodeling in the coming years, as home enjoyment has become more important.
Personnel shortages are also quite an obstacle in the construction industry. Contractors and construction specialists are fishing in the same pond. The supply of work is quite nice, given the economic situation, but skilled personnel are scarce.
