Dutch buyers and investors off to a slow start

24 May 2024 Consultancy.eu 3 min. read
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M&A activity in the Netherlands has come off to a slow start in 2024, with both deal volume and deal value down significantly on the previous quarter. That is according to research from Oaklins.

Global dealmaker Oaklins has released the latest Netherlands edition of its M&A series, finding that overall market sentiment has slowed due to a number of macro-economic developments including economic uncertainties, geopolitical unrest, high interest rates, as well as a valuations mismatch between buyers and sellers.

The number of transactions closed dropped to 216 in Q1 of 2024, the lowest number since Oaklins started tracking the data three years ago.

Private equity deal involvement in the Netherlands

With the share of very large deals (>€250 million) down, overall deal value also declined. “Indeed, we observed a slow start of the year for Dutch M&A activity,” said Tijn Bastiaans, partner at Oaklins in the Netherlands, where he heads the Private Equity practice.

Much of the market’s dip came from slumped deal appetite at financial sponsors, with their deal involvement down 49%, as opposed to the 15% decrease seen among strategic deals (those closed by companies). “That’s not a major surprise,” said Tijn Bastiaans, “as private equity deals are typically more affected by rising interest rates and geopolitical turmoil.”

With 38 transactions, Q1 2024 marked the least active quarter for private equity in years. The general trend however remains intact: investors have seen their share of the market increase to roughly a quarter of the total. Major players in the scene include the likes of Main Capital, Holland Capital, Waterland, Bencis, Fields Group, and MKB Fonds.

Deals per size category in the Netherlands

The outlook

Analysis of key deal drivers, such as lead inflows in previous quarters and sale processes currently in the market, suggests that Q2 will be another sluggish quarter for dealmakers. 

The Oaklins report does forecast a “significant uptick” in activity from Q3 onwards. Tijn Bastiaans: “We anticipate a more positive outlook in M&A activity based on the expected exit pressure on private equity firms [who are keen to exit investments across a 5–7-year time horizon to capitalize on gains] and the increasing number of companies that are preparing to launch their deals.”

“We’re also noticing increased pitching activity on both the buyer and seller side,” said Tijn Bastiaans, adding however that such deal processes typically take months to unfold, meaning that material impacts should be seen by Q3 onwards and not before.

Number of deals in the Netherlands

Meanwhile, private equity firms are sitting on a record pile of ‘dry powder’ – money that is waiting to be put to work. Main Capital for instance managed to raise €2.4 billion for two software funds, despite challenging fundraising conditions. “There is clearly an abundance of money in the market.”

About the study

All insights come from the report by Oaklins, one of the world’s leading M&A advisory firms with around 800 staff globally. The researchers used several M&A databases for their analysis, including Mergermarket, Dealmaker.nl and Pitchbook.