Entrepreneurial Buyout Monitor. A clear view on investment results 2013 - outlook 2014

Abstract

Welcome to the first edition of the Entrepreneurial Buyout Monitor – a snapshot of the trends and challenges involved in management buyouts and buy-ins of SMEs in Belgium from a practitioner’s perspective. We captured the opinion of 175 buyout experts in Belgium – including bankers, private equity players, lawyers, brokers and M&A advisers. There has been a general lack of understanding and transparency of the smaller segment of the buyout market. Here, we give insights and trends on the general investment climate for SME buyouts, including: 1) Deal flow 2) Deal-making 3) Financing Overall, the results indicate the investment climate has generally improved and this is expected to continue in 2014. The key insights from the survey are: 1) Deal flow is increasing – but with greater levels of competition and a lack of professionally run SMEs with the potential to be transferred, sourcing high-quality deals remains challenging 2) Lending conditions continue to be challenging – putting pressure on investment returns and urging investors to look for alternative deal structures 3) Investors have to be more proactive – focusing on targets with the potential to add value through cutting costs or pursuing growth opportunities 4) Potential vendors need to be realistic – and either adjust their price expectations or wait for improved operating results and an uplift in multiples when the economic climate improves