You want to sell your recycling business? Then it's good to know what the takeover market in the field of recycling companies looks like. Although not a day goes by that people don't talk about recycling waste, especially plastics, the acquisition industry has been stable for years.
The numbers in the recycling market are not anything to write home about right now, as a storm is raging through the waste landscape. There is a lot more waste being produced by some businesses, but almost nothing at others. The number of acquisitions has been steady for several years and large organizations are finding it difficult to predict what the future holds.
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 industrial and manufacturing sector - which includes a recycling company - an indicative EBITDA multiple range 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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Want to buy a business or sell a business in the Industry & Manufacturing 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 Industry & Manufacturing sector. Because in any buying or selling process, thorough preparation gives peace of mind, overview and structure.
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With global ambitions to make the economy circular, recycling companies are essential. That they will play an increasingly important role in the future probably doesn't surprise anyone, but what's the situation today?
In numbers, the number of recycling companies in 2024 looks 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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A number of trends and developments will inevitably cause changes over the next few years, but also offer recycling companies growth and acquisition opportunities:
An increase in investment in the waste industry and specifically in the future of recycling. The petrochemical and food packaging industries are joining forces to boost advanced recycling. This could be a breakthrough in innovative recycling techniques, but Rabobank does not dare say for sure. There is talk of complementing current techniques because there is not yet enough experience with advanced recycling.
Nationwide, there is the well-known "Netherlands in 2050 Circular" plan. Waste incineration is strongly discouraged with legal and financial incentives while recycling and reuse are encouraged. Major powerhouse Suez sees major changes among partners and customers and underlines the many challenges ahead.
The fact that the government is investing in better waste treatment and reduction is an incentive for the business market. Producing less plastic, especially in the food industry, is changing the way waste is processed. Recycling companies are thus able to make the waste more recyclable.
According to ABN Amro, we haven't really mastered renewable energy yet, but recycling materials has. Construction materials in particular are a ballast for the waste industry, but upcycling raw materials creates new opportunities.
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