You want to sell your contracting business? Then it's good to know what the takeover market in the field of contracting companies looks like. Agricultural, arable and forestry operations have a fairly stable revenue pattern, but ancillary income is proving more valuable than ever.
The acquisition market for payroll companies is fairly consistent, without too big peaks or valleys.
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 agri & food sector, which includes a contracting company, an indicative range of EBITDA multiple of 5.4 to 6.1 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).
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Do you want to buy a business or sell a business in the Agri & Food sector? With this Brookz Sector Monitor we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in the Agri & Food. Because in every buying or selling process, thorough preparation gives peace of mind, overview and structure.
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There are many startups and small-scale organizations in the market every year, so the number of businesses with one person working is relatively high.
In numerical terms, the number of contracting companies in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably cause changes over the next few years, but also offer contracting companies many growth and acquisition opportunities:
Since contractors often export manure for farmers, there is an opportunity here for solving the manure problem. Special methods and machines are needed to process the manure in the right way to reduce the amount of CO2 and phosphate. This is a costly job, but collaborations could offer a solution, Rabobank said.
A farm store, cow cuddling, farm golf and farm camps are examples of side activities that the agricultural contracting business could focus on. With societal changes, where consumers and entrepreneurs want to retreat more to the countryside, the farmer can scale up activities in cooperation with the contracting company, according to ABN Amro.
Precision agriculture is in full development and provides higher yields in agriculture and better treatment of animals in livestock farming. Precision agriculture requires specialized equipment and knowledge. As a contracting company, it may be worth investing in this.
