The Dutch M&A market is running at full speed. After the brief downturn in early 2020, activity has increased sharply in almost all sectors since the summer of 2020. In the first half of 2021, activity continued to grow. The market is characterized by high demand for suitable acquisition candidates, with the supply of target companies increasingly lagging behind the high demand. The result is an increase in purchase prices driven by the combination of scarcity in suitable supply, low cost of capital and a large amount of capital available for acquisitions.
Specific Dutch sectors with high levels of M&A activity include flexible staffing, insurance, childcare and managed services (networks, cloud, software, communication). Many private equity players are active as buyers in these markets building portfolios.
For the second half of 2021, we anticipate that this strong trend in M&A activity will continue unabated and that the shortage of suitable target companies will put further upward pressure on purchase prices.
Post by Bas Brusche, FACTOR & ROS