In the last 3 years more than 2000 takeovers have taken place with a total value of 500 million Euros. On the back of this, consultancy firm, EY recently released the results of research they did for Dutch newspaper, the Financiële Dagblad showing that entrepreneurs want to profit from the current high acquisition prices. Entrepreneurs are being convinced to sell their companies for high prices, even though they weren’t really planning on doing so before.
This trend could be called somewhat remarkable: there are less companies up for sale, but the number of deals being done isn’t going down. Companies in the media, technology and telecoms sectors are the most sought-after at the moment. As a lot of companies are faced with technology advances that are quickly and often changing, and the problems that come with this if you don’t have this technical knowledge in house, they are more often choosing to buy a company that already has this knowledge.
A striking fact is that the number of acquisitions by foreign companies (mainly private equity companies that are also active in the Netherlands) increase last year from almost 75 to more than 100.
As the economy is now much more attractive, more entrepreneurs are wondering if the time is now right to sell their company. This group of entrepreneurs consists mainly of the older generation and they don’t have anyone to take over the family business or to keep it running.
Entrepreneurs really shouldn’t let themselves be tempted only by the money that they could earned by selling their business. They shouldn’t lose sight of the other important issues involved, but should keep these things in mind:
– The impact of the sale on your staff (will they have to be made redundant, perhaps?) and the impact on the local economy (will your establishment be closed down?).
– Could there be any potential claims made against you? (Or have you negotiated good guarantees and indemnities).
– And what are you going to do once your business has been sold? Retire, take a sabbatical or start a new company (are you allowed to do this or is there a competition clause applicable in your sales agreement so that you can’t work in this branch for X number of years?)
So, it can be very interesting for entrepreneurs to sell their company because right now very high prices are being paid for companies with a stable and predictable cashflow.
But for entrepreneurs who want to take over a company, there are also lots of great opportunities out there!
Togather helps you find financial solutions, even though factoring and/or securitisation doesn’t always appear to be the obvious choice in this market. We have already helped plenty of entrepreneurs to free up cash: this is mainly done by selling the acquired company’s portfolio to Togather straight after the takeover, which means that the purchase price is covered by a (big) share of this finance. We also purchase any outstanding claims that have not yet expired, which means that a substantial number of debtors can suddenly be turned into liquidity.