You want to sell your installation company? Then it's good to know what the takeover market looks like in the field of installation companies. The installation industry is highly fragmented, with many small businesses. There is a tendency toward economies of scale, which will further increase the number of mergers and acquisitions in the coming years.
Since the advent of the global corona pandemic, the installation business has been in a growth spurt. A business acquisition increases stability. It is often a necessary step to increase presence in a region or to spike revenue growth.
Since last year, there has been a shortage of essential materials on the Dutch market, forcing installers to dig deep into their pockets. This shortage is expected to increase in the coming years, leaving new supplies of materials scarce and costly.
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 construction and installation technology, the industry to which installation companies belong, an indicative EBITDA-multiple range of 3.7 to 4.7 currently applies, 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 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.
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Businesses in the installation sector are actively engaged in the design, advice and maintenance of technical installations, such as electrical, climate, plumbing and insulation. According to ABN Amro, 65 percent of installation work relates to residential and non-residential construction, 19 percent to industry and 16 percent to civil engineering.
In figures, the number of installation companies in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably bring about changes in the coming years, but also offer the installation sector many opportunities for growth and thus acquisition:
More and more installers are positioning themselves as total providers, offering consulting, design, management and long-term maintenance. This has led to a trend of economies of scale in recent years. This can come about through business acquisitions, but an increase in permanent partnerships to generate construction volume and reduce risks is also becoming increasingly common.
In recent years, the installation ratio - the share of installation technology in construction production - has been steadily increasing. This is due to an increasing level of equipment in residential and commercial buildings.
In addition to energy savings, home automation (home automation) will become a major growth market in the coming years. This boost is due to an aging society and higher consumer demands for luxury, comfort and safety.
The increased complexity of installations has significantly strengthened the position of the installer in the business chain. With a shift toward direction and advice, the installer is increasingly able to fill his order portfolio with long-term contracts. The improvement in the market has also had a positive effect on employment; almost half of the installers expect a growth in the workforce, according to sector association Techniek Nederland.
