You want to sell your lumber business? Then it's good to know what the takeover market looks like in terms of lumberyards. The demand for lumber has increased tremendously recently and the growth is expected to continue.
The number of consolidations in this industry is currently peaking significantly, after being mostly stable in recent years.
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 & manufacturing sector, which includes a lumber business, 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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There are many startups in the industry every year, which also makes many businesses with only one person working visible.
In numerical terms, the number of lumberyards 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 lumber dealers many growth and acquisition opportunities:
Consumers like to look closer to nature, which means that more wood is also being chosen in the construction and realization of home furnishings. Trade magazine Houtwereld emphasizes the advantages of building with wood, because in addition to sustainability, stress-reducing work and capturing nitrogen from the air is also a plus.
Timber is expensive, due to increasing demand. There has been an increase in the number of prefabricated projects, making wood the preferred choice in the industry, according to ABN Amro. According to CoBouw, the industry has not seen such a noticeable price increase in 20 years.
Demand is rising and both industry and consumers are eager to continue building in a sustainable manner. The downside, however, is that overseas supply is slowing and prices are rising, so this may force a temporary halt on lumber production in the future.
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