Blenheim M&A | Looking back at 2023 and ahead to 2024

In a turbulent year for the takeover market, Blenheim Advocaten has proven to be a trusted advisor to entrepreneurs and investors in the Netherlands. Despite rising interest rates and a reluctant Private Equity position – which pulled the M&A market to its lowest point in 10 years – Blenheim is proud to look back on more than 23 successful transactions led by the Corporate/M&A team. In this article, Blenheim’s M&A lawyers look back at four transactions. After which we take a look into the future and the expectations for the acquisition market in 2024.

A look back at a turbulent 2023

Arjen Paardekooper – Partner and attorney in Corporate/M&A practice at Blenheim – highlights the challenging circumstances of 2023 (in Dutch):

“Interest rates went up step by step and there seemed to be no end in sight. That caused the M&A market to almost grind to a halt”.

Despite these challenges, Blenheim has held its own and has had successes as a consultant working with various entrepreneurs.

Blenheim advises Bonusan shareholders on entering into partnership with BD-Capital

Blenheim M&A lawyers advised the Bonusan shareholders of partnership with bd-capital. Bonusan is a health company with 120 years of experience in nutritional supplements formulated based on science and insights from the practice of health professionals. The partnership allows Bonusan to work with bd-capital to increase the positive impact of Bonusan and Natura Foundation. Learn more about the deal here.

Blenheim advises management Julius Clinical Research on acquisition by Ampersand Capital Partners

Arjen Paardekooper, Dirk de Waard and Olivier Bergh advised the management of Julius Clinical on the acquisition by Ampersand Capital Partners. The investment by and partnership with Ampersand gives Julius Clinical the opportunity to further grow and to expand their geographic footprint in Europe and North America. More information about this deal can be found here.

Blenheim advises AdBirds on sale to Happy Horizon

Corporate law and M&A attorney Daan Willemse advised the selling party digital marketing agency AdBirds and its shareholders on its sale to the Happy Horizon group. Happy Horizon acquires all shares of AdBirds, with key management remaining on board. With the acquisition, Happy Horizon is taking a big step towards internationalization. Happy Horizon now has coverage in the rest of the world in addition to offices in seven Dutch cities. For more information about this deal, check out this page.

Blenheim advises Nexton’s shareholders on sale to Dura Vermeer

Blenheim’s M&A lawyers advised Nexton’s shareholders on its transfer to Dura Vermeer. The acquisition marked the start of a strategic partnership in 2023. Nexton is a contractor on issues related to smart building, energy transition, sustainability, circularity and as a service models. They own 15 independent consulting and installation companies and product suppliers with a total turnover of €47.5 million in 2022. Dura Vermeer, a family business in existence since 1855, is a top 5 company in the Dutch construction industry with a total turnover of € 1.6 billion in 2022. With approximately 2,800 employees, Dura Vermeer is active in residential construction, non-residential construction, infrastructure and engineering. See this page for more information about this deal.

Expectations for the takeover market in 2024

While 2023 certainly will not go down in the books as a bad year, it did bring challenges for entrepreneurs. Fortunately, inflation has fallen since the beginning of the year. This means good news for the acquisition market, which is getting ready for a renewed period of growth. So states Arjen Paardekooper.

”One in three entrepreneurs in the Netherlands now wants that ‘for sale’ sign in their yard, with investors having billions burning a hole in their pockets”.

The recovery of the Dutch acquisition market has continued over the past six months. In the second half of 2023, the number of sales transactions increased by 55 and the average sales price of an SME ran to 4.75 times EBITDA. So the prospects for the coming year give hope for a booming period for acquisitions, with entrepreneurs, lawyers and investors enthusiastically exploring opportunities.

Debt & capital advisory

Private debt financiers are eager to deploy their cash reserves. In particular, they are targeting companies that generate more cash flow and are resilient, albeit with more prudent debt ratios. This is because companies’ debt repayment capacity is declining with increased interest rates. Alternative deal structures, such as seller loans and earn-outs, are likely to continue to emerge to bridge the gap between buyers and sellers.

Private equity

Private equity also has cash reserves to allocate and must also sell assets to realize required returns, so 2024 could be a better selling year than 2023. Moreover, given macroeconomic issues such as sustainability, digitalization and labor shortages, we expect consolidation could unlock untapped value – especially in labor-intensive business services and energy and resource-dependent sectors such as manufacturing. With fewer resources available in the market, some private equity funds may be considering SMEs earlier than before.

Shift to buyer’s market

Sellers may be seeking more certainty in transactions and could shift from an open market with several potential bidders to more one-on-one deals with a reliable buyer. Transactions are taking longer and show a shift from an overheated seller’s market to a buyer’s market. This is reflected not only in a decrease in the number of interested parties per company, but also in falling sales prices.

In an uncertain market, it becomes more difficult to determine the return on investment of an acquisition. Obtaining funding is complicated by rising inflation and rising interest rates, which plays a crucial role in this process. In short, this uncertainty leads sellers to make concessions, which is reflected in stricter deal terms demanded by buyers. Buyers will now be more cautious and spend considerably more time on due diligence than before. Sometimes by waiting a quarter to see if the company can live up to its projections. These trends illustrate the need for careful consideration and negotiation in today’s acquisition landscape.

Fortunately, the future looks bright. As in the housing market, demand seems to be prevailing. Although the process of selling companies may take a little longer, there is still interest from buyers in the acquisition market. Perhaps not in the same numbers as before, but strategic buyers with financial resources and investors looking for returns will certainly remain active and continue to seek opportunities in 2024.

Legal advice on acquisitions

For a seller, it is essential to be aware in advance of all the potential pitfalls that may arise in an acquisition. Blenheim’s Corporate/M&A team is ready to support you. Please feel free to contact us with any questions you may have.