Entrepreneurial Buyout Monitor. A clear view on investment results 2014 - outlook 2015

Abstract

Welcome to the second 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 opinions of 169 buyout experts in Belgium – including bankers, private equity investors, mezzanine players, family offices, lawyers, brokers and M&A advisers. Overall, the results indicate the investment climate has considerably improved – as expected from last year’s edition. The outlook for 2015 remains positive. The key insights from the survey are: 1) DEAL FLOW IS INCREASING – however, with higher levels of competition and more favourable lending conditions, we’ve also seen higher multiples – especially for medium sized and larger deals. It’s tougher to achieve attractive returns, so the deal origination process is critical. 2) MORE FAVOURABLE DEBT MARKETS – overall debt multiples increased and the cost of lending significantly dropped. This was true for medium sized and larger deals. However, lending conditions continue to be challenging for smaller deals – so they may need more creative deal structures. 3) ALTERNATIVE INVESTORS BECOME MORE PROMINENT – both family offices and mezzanine investors become more active in smaller MBO/MBI transactions. 4) PRIVATE EQUITY INVESTORS NEED A CLEAR STRATEGY – they need a more focussed approach to finding opportunities for growth while cutting costs. And so they must gain a deeper understanding – and further insights into the sectors they’re targeting.