You want to buy a pharma business or sell your pharma business? Then it is good to know what the acquisition market in the field of pharmaceutical businesses looks like. An aging population, more knowledge of innovative treatments and more polypharmacy patients is increasing the demand for drugs. The pandemic added to that and boosted pharmaceutical businesses.
In the pharmaceutical market, few mergers and acquisitions take place. This is because the number of businesses in the Netherlands is not very large, but also because pharmaceutical businesses are relatively large and have to comply with strict legislation.
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 healthcare and pharma sector - which includes a pharmaceutical business - an indicative EBITDA multiple range of 5.9 to 6.9 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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Want to buy a business or sell a business in the healthcare & pharmaceuticals 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 healthcare & pharmaceuticals. Because in every buying or selling process, thorough preparation gives peace of mind, overview and structure.
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There are relatively many large businesses in this sector and therefore a nice spread of large and small businesses is visible.
In figures, the number of pharmaceutical businesses in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably cause changes in the coming years, but also offer pharmaceutical businesses many growth and acquisition opportunities:
The pharmaceutical industry produces drugs, which are traded globally based on supply and demand. This does not distinguish this industry from other markets. But drug supplies - and use - are regulated nationally in many countries. Not all drugs may be used here, and stocks are relatively low, leading to quick shortages. Meanwhile, the Netherlands has a policy that 85% of short-term shortages must be met, and that means more demand for producers.
While traditional medicine is primarily focused on treatment, the focus is increasingly shifting to prevention. Prevention is better than cure. This may also cause a shift in the need for type and quantity of drugs.
