• 10 tips for working successfully with a private equity investor

      Manigart, Sophie; Meuleman, Miguel (2018)
      Our research insights translated into added value for you and your organisation Research – either academic or research for business – can only be valuable when shared. That’s why we translate our research into easy-to-read whitepapers focusing on the key insights that are relevant for you as a manager. This way, your organisation can profit directly from the latest research, the newest theories, the expertise of our faculty and much more.
    • 10 Truths about negotiating

      Jordaan, Barney (2017)
      Key insights: Listen in a way that encourages others to talk. Talk in a way that will encourage others to listen. Be prepared – those who prepare best do best. Try to see issues through the eyes of the other party. Adopt a positive mindset. Focus on creating and claiming value.
    • 1992: Impact op de accounting- en consultingbureaus

      Ooghe, Hubert; Manigart, Sophie; Bruyneel, W. (1990)
    • 2011 Barometer of Social Responsibility: Sustainable development firmly rooted in companies in Belgium.

      Graham, Véronique; Swaen, Valérie; Louche, Céline; Callens, Isabelle (2011)
    • 2016 M&A Monitor: Shedding light on M&A in Belgium

      Luypaert, Mathieu (Vlerick Business School, 2016)
      In these times of globally booming M&A activity, I am pleased to present the first M&A Monitor of the Centre for Mergers, Acquisitions and Buyouts of Vlerick Business School. This Monitor supersedes the annual Entrepreneurial Buy-out Monitor that Vlerick has conducted over the past years. The scope has been expanded to consider all types of mergers and acquisitions. By capturing the opinions of 142 M&A experts in Belgium – including bankers, private equity investors, advisors, brokers, lawyers, family offices and mezzanine players – we provide a comprehensive overview of current trends and challenges in the domain of M&A in Belgium. The findings presented in this report are of great interest to all professionals active in the Belgian M&A market, as well as to decision-makers on both the selling and the buying sides. The results strongly indicate that Belgian M&A activity is surging − with 2 out of 3 respondents observing an increase in the number of M&A transactions. Competition amongst buyers has intensified, as the current market is clearly demanddriven, fuelled by easily available bank financing and the extensive amount of dry powder of private equity companies. The increased interest of family offices, wealthy individuals and foreign PE firms in the Belgian midcap segment puts additional pressure on the buy-side. A demand-driven M&A wave naturally results in rising valuations and M&A multiples. The experts surveyed overwhelmingly indicate that multiples have increased over the past year, leading to an average EV/EBITDA multiple across all industries and size classes of 6.1. Nevertheless, the imbalance between high demand and limited (high-quality) supply of companies also calls for caution. Academic evidence shows that transactions taking place at the top of an M&A wave are typically less profitable. These deals are more likely to be driven by hubris and herding behaviour. In addition, most interesting targets have usually been acquired at the start of the wave, leaving only targets that do not fully meet the ideal selection criteria. That’s why a detailed upfront assessment of the motives for buying a company, and a realistic estimate of potential synergy gains, prove to be of utmost importance in successful M&A. Our survey results indicate that realising economies of scale is considered to be the primary motive for strategic buyers, while financial buyers focus mainly on opportunities to follow a buy-andbuild approach or improve revenue and/or margin. The results presented in this monitor also provide interesting insights into the deal structure (use of vendor loans, earnouts, leverage ratios) and process (nature of sale process, use of vendor due diligence, length of M&A process). We open the black box of price negotiations and find, for example, that almost 1 out of 2 experts indicates that the average final deal price exceeds the initial indicative offer, while only 1 in 4 reports a lower final deal price compared to the offer price.
    • 2017 M&A Monitor: Shedding light on M&A in Belgium

      Luypaert, Mathieu; De Lange, Nicolas (Vlerick Business School, 2017)
      Following an annual tradition, this M&A Monitor presents an overview of current trends in the Belgian M&A market. Based on survey responses of 120 M&A experts in Belgium, we present unique insights into the evolution of M&A activity, typical multiples, deal structures and process characteristics. Every year, we devote special attention to one particular aspect of M&A. In the current edition, we focus on cross-border transactions by Belgian acquirers, representing around one third of all deals that the surveyed experts have worked on. The most targeted countries in Europe are France, The Netherlands and Germany. Despite a global drop in M&A activity (from a record level of $4.5 trillion in 2015 to around $3.5 billion in 2016), Belgian M&A volume is still growing intensively. Two out of three respondents observed an increase in Belgian M&A activity in 2016. Moreover, only 10% of all experts anticipate a possible drop in 2017. While we observe a similar picture for Belgian targets acquired by international companies, more conservative growth numbers are expected for cross-border takeovers by Belgian acquirers. An uncertain political climate as a result of the Brexit, Trump’s US protectionism, and upcoming elections in several EU countries might impede Belgian acquirers from pursuing a cross-border external growth trajectory. The continued traction in the Belgian M&A market is also reflected in elevated multiples. The average Enterprise Value (EV)/EBITDA multiple rose for the fourth year in a row towards a level of 6.4. Belgian acquirers are even found to pay on average 7 times EBITDA in cross-border acquisitions. Academic evidence indicates that cross-border acquirers are willing to pay higher premiums because of the cross- border targets’ country-specific knowledge and local distribution networks. The respondents indicate that bank financing is readily available at cheap rates and has improved especially for the segment of deals worth less than €5 million. The average ratio of net financial debt (NFD)/EBITDA for this segment of smaller transactions increased from 2.1 in 2015 to 3.3 in 2016. Banks seem to increasingly consider acquisition financing of smaller companies with a proven track record as an alternative source of income, leading to looser credit standards. In line with rising bank financing, a decline in the amount of (semi-) equity that is needed to finance an MBO/ MBI is observed for transactions under €5 million, dropping even below 30% on average. Similarly, the use of vendor loans and earnouts across all deal sizes has diminished significantly. These findings, and many other critical aspects of domestic and cross-border M&A, are explored in detail in this 2017 M&A Monitor.
    • 2018 M&A Monitor: Shedding light on M&A in Belgium

      Luypaert, Mathieu; Spolverato, Gianni (Vlerick Business School, 2018)
      Is the sky really the limit for M&A? Since the first edition of this Belgian M&A Monitor five years ago, we have witnessed a continuous surge in the number of transactions and the multiples being paid. The average EV/EBITDA multiple in Belgian M&A increased from 5.0 in 2013 to 6.7 times EBITDA nowadays. The number one concern highlighted by M&A advisors that filled in our survey, is the current overheating of the market. Nevertheless, two out of three respondents expect M&A activity in Belgium to keep on rising in 2018. It is of course not surprising to observe elevated multiples in a seller’s market that is characterized by economic recovery and easy access to cheap financing. However, the question remains of whether acquisition prices have reached their limits. Part of the answer lies in the interpretation of the multiple which is in fact simply the inverse of the required return by investors. An EV/EBITDA multiple of 6.7 indicates that investors would realise a return of approximately 15% before taking into account any investment expenditures. A further increase in prices would result in returns that no longer outweigh the risks associated with the acquisition. We can only hope that both strategic and financial buyers keep on making this reflection. Despite the critical note in the above paragraph, high multiples could of course be warranted in case of strong growth potential or limited risk in the target’s business. That is why we report for the first time valuation and financing multiples per sector. Industries with relatively lower multiples are “Retail” (5.3x EBITDA), “Transport and logistics” (5.7x) and “Construction” (6.0x). Sectors characterized by superior multiples are “Technology” and “Healthcare” (both 8.2x), “Pharmaceuticals” (9.2x) and “Real Estate” (9.3x). We are convinced that publishing these sector multiples increases the practical usefulness of this Monitor even further in setting price expectations for Belgian M&A. In previous editions, M&A advisors emphasized the Belgian unstable regulatory and tax environment as a restraining factor for M&A activity. In our most recent survey, we explicitly inquired respondents about their expectations concerning the reform package agreed upon by the Belgian federal government and presented in its “summer agreement”. While the vast majority of M&A professionals expect a neutral or slightly positive impact due to especially the decrease in corporate tax rate and the introduction of tax consolidation, some also highlight the interest deduction limitation based upon EBITDA and more stringent conditions for the exemption of capital gains as possible limiting factors. In the remainder of this 2018 M&A Monitor, detailed insights are presented into the evolution of Belgian M&A activity, current typical payment and financing structures and various process characteristics that could be highly relevant for buyers, sellers and all professional parties involved in Belgian M&A.
    • 2019 M&A Monitor: Shedding light on M&A in Belgium

      Luypaert, Mathieu; Spolverato, Gianni (Vlerick Business School, 2019)
      All good things must come to an end… This phrase also holds in M&A markets that have historically been characterized by a wave pattern. While the most recent global wave started around five years ago, a turning point might have been reached. The global amount spent on acquisitions increased further in 2018 to almost $4 trillion, despite a very strong drop in deal volume during the final quarter. The sudden plunge in deal activity seems to be driven by political and economic uncertainties rather than financial constraints, with a cost of borrowing staying at a historically low level and dry powder at private equity funds reaching a record level of $2 trillion (Bain & Company Global PE report). The results of our own Belgian M&A monitor confirm that deal activity surged in 2018 but, at the same time, the surveyed experts largely expect a stabilising market in the year to come. Interestingly, some remarkable changes can be observed in motives driving Belgian M&A transactions. Whereas realising economies of scale stays the number one acquisition reason, other motives, like gaining new technologies and attracting talent (or “acqui-hires”), have increased significantly in importance over the past years. Deal drivers in private equity transactions remain constant with a buy-and-build approach as preferred value creating strategy. In addition, we observe a significant decline in the fraction of cross-border deals by Belgian acquirers from 36% to 25%. The major contribution of our yearly M&A monitor is that we present unique insights into the specific Belgian M&A setting that is particularly characterized by small and mid-market deals. While only limited information is publicly available on mid-market M&A, virtually no data is published for really small transactions. Therefore, we present a separate category of data for deals with a transaction value below €1 million for the first time. Remarkably, the surveyed professionals are much more positive on growth expectations in this segment of the market with 2 out of 3 respondents expecting a further growth in 2019. The intensified competition in the midmarket segment might indeed push strategic as well as financial buyers more and more towards smaller deals. In last year’s M&A monitor, we expressed a clear call for caution in terms of multiples paid, questioning whether the elevated acquisition prices still allow to realise returns that outweigh the risks of the transaction. For the first time in six years, however, we now observe a slight drop in EV/EBITDA multiple across all Belgian transactions from 6.7 to 6.5 (ranging from an average of 4.4 for deals smaller than €1 million to 9.7 for deals exceeding €100 million). The minor reduction in multiples is mainly driven by the smaller deal categories (below €5 million). Nevertheless, upcoming sellers should not yet panic as the majority of surveyed experts do not yet predict a significant decrease in multiples in 2019. These observations and many other typical deal, financing and process characteristics are presented and discussed in detail in the remainder of this document.
    • 21st Century leadership through the batteries of change

      Letens, Geert; Verweire, Kurt; De Prins, Peter (ESTIEM, 2018)
    • 35 Years of studies on business failure: an overview of the classic statistical methodologies and their related problems

      Balcaen, Sofie; Ooghe, Hubert (Vlerick Business School, 2004)
      Over the last 35 years, the topic of business failure prediction has developed to a major research domain in corporate finance. A gigantic number of academic researchers from all over the world have been developing corporate failure prediction models, based on various modelling techniques. The ‘classic cross-sectional statistical' methods have appeared to be most popular. Numerous ‘single-period' or ‘static' models have been developed, especially multivariate discriminant models and logit models. As to date, a clear overview and discussion of the application of the classic cross-sectional statistical methods in corporate failure prediction is still lacking, this paper extensively elaborates on the application of (1) univariate analysis, (2) risk index models, (3) multivariate discriminant analysis, and (4) conditional probability models, such as logit, probit and linear probability models. It discusses the main features of these methods and their specific assumptions, advantages and disadvantages and it gives an overview of a large number of academically developed corporate failure prediction models. Despite the popularity of the classic statistical methods, there have appeared to be several problems related to the application of these methods to the topic of corporate failure prediction. However, in the existing literature there is no clear and comprehensive analysis of the diverse problems. Therefore, this paper brings together all criticisms and problems and extensively enlarges upon each of these issues. So as to give a clear overview, the diverse problems are categorized into a number of broad topics: problems related to (1) the dichotomous dependent variable, (2) the sampling method, (3) non-stationarity and data instability, (4) the use of annual account information, (5) the selection of the independent variables, and (6) the time dimension. This paper contributes towards a thorough understanding of the features of the classic statistical business failure prediction models and their related problems.
    • 3D Marketing: sleutels tot nieuwe doelgroepen

      Michiels, Karel; Segati, Jean-Marc; Weijters, Bert (Linkeroever Uitgevers, 2006)
    • 3M Automotive Aftermarket Division

      Muylle, Steve; Rangarajan, Deva; Dom, Alfons (2007)
      This case highlights the various factors that affect how an organisation moves from a product focused approach to a solution-based approach. The case incorporates the process change involved in this transition, and in particular focuses on the changes in customer orientation, the corresponding value proposition, and the underlying value network. These objectives are accomplished by illustrating the 3M AAD (Automotive Aftermarket Division) situation over time, as structured in parts (A), (B) and (C). The teaching note provides discussion questions that follow each part and form a link to the following part.
    • 3M Automotive Aftermarket Division - Teaching note

      Muylle, Steve; Rangarajan, Deva; Dom, Alfons (2007)
    • 4 Myths about employee engagement

      Dewettinck, Koen; Van Cauwenberg, Silke (2017)
    • 4 Observations about generation Y

      Buyens, Dirk; Van Cauwenberg, Silke (2016)
      Key insights: For Generation Y, the need to make friends in the workplace is no longer as crucial. Work-home balance is becoming increasingly important for new employees. Less and less employees are willing to promise a flexible attitude towards their employers. Generation Y employees don’t necessarily want to change employer