You want to sell your ICT business? Then it's good to know what the takeover market in the field of ICT businesses looks like. For years, the ICT sector has been one of the driving forces behind the growth of the Dutch economy, especially in times of crisis. Also in the field of mergers and acquisitions, the sector is running at full speed.
The year 2022 was especially a top year for the Dutch ICT takeover market.
There are many ways to value a business. A commonly used method to express 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 IT services sector - to which an ICT business belongs, according to the Brookz Takeover Barometer, there is currently an indicative range of EBITDA multiple of 5.9 to 7.2. 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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Want to buy a business or sell a business in the IT Services & Software Development 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 IT Services & Software Development sector. Because in any buying or selling process, thorough preparation provides peace of mind, overview and structure.
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The ICT industry has a great diversity of businesses. Just think of businesses active in application management, hardware and software, telecom, web development and security. It is also a very dynamic sector. Developments follow each other in rapid succession; Augmented Reality, Virtual Reality, Artificial Intelligence, blockchain, Internet of Things, big data, cryptocurrency... Innovative startups are springing up like mushrooms and are popular to eventually buy and sell as mature ICT businesses.
In numerical terms, the number of engineering companies in 2024 looked like the following (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!
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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).
In particular, the growth of the ICT sector is being driven by the digitalization that has been further triggered by the corona crisis and is impacting the entire society and all industries. It is also benefiting from a favorable economic climate which is positively impacting IT budgets of businesses outside the sector.
An important driving force behind the revenue growth of ICT businesses is the recurring (recurring) revenue model, also referred to as-a-service revenue model. Here, the ICT supplier enters into an agreement with its client whereby products/services are purchased on a monthly payment per user.
Acquisition advisors see a continued buzz in the acquisition market for ICT businesses due to the favorable development of the economy, low interest rates and the large amount of available investment money. Capacity takeovers also play a role in this: many ICT businesses are being taken over because of their (scarce) staff. These takeovers are therefore not about the revenue, customers or market position of the business to be acquired, but mainly about the number of employees that can be taken over.
To keep the earth livable, CO2 emissions must be reduced. ICT plays a crucial role in making the world around us more sustainable. Through digitalization, the sector is improving efficiency and thus saving energy in all sectors. Consider, for example, sensors that measure where people are present in an office and then adjust energy consumption accordingly.
