You want to sell your engineering firm? Then it is good to know what the acquisition market in the field of engineering firms looks like. For years there has been a development going on in this sector: specialize or consolidate.
Consumers who benefit from the construction industry are interested in sustainability, but in addition, there is another development going on. The big players are getting bigger and bigger, leaving the remainder of businesses to be mostly one-person shops. Energy transition, design and urban development are important themes in the market.
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 business services, which includes an engineering firm, an indicative range of EBITDA multiple of 4.6 to 5.5 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 business services 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 business services sector. Because in every buying or selling process, thorough preparation gives peace of mind, overview and structure.
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The construction industry is abuzz with nitrogen measures and the impact of the pandemic, but sustainability has been a focus for engineers for years. CO2 reduction, climate change and investing in a circular economy. Shifts in the supply chain are also taking place, making responsibility and connection an issue.
In figures, the number of engineering firms 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 engineering firms many growth and acquisition opportunities:
From linear to circular economy. This transformation requires creative and businesslike engineers. On the one hand, this is an investment that requires agencies' time and energy, but it also returns a lot, according to ABN Amro.
Both for architects and engineers, technological developments are essential for survival in the industry, writes ABN Amro. Innovation, sustainability and high-tech gadgets are the basis for the future market position.
Urbanization goes hand in hand with climate change. Urban areas continue to expand, due to an increasing world population. With so many people on the planet, this requires innovativeness and creativity from engineers, as there needs to be more green space as well as more living space. In a report by the industry association Royal NLingenieurs, climate and urbanization are 2 of the 6 central themes for the coming years.
Sharp prices and greater risks are causing loss-making projects, Rabobank writes. Design and execution are increasingly coming under the responsibility of one all-encompassing organization. This also puts contractors in charge of legal matters, such as permits.
