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KPMG: “Dutch M&A market out of sync with Europe and the world”

Dutch M&A market out of sync with Europe and the world

Deal volume in the Dutch M&A market has further increased in 2019 amidst a slowdown of deal volumes in the EU and worldwide. This is concluded based on semi-annual research by KPMG.

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KPMG: “Dutch M&A market out of sync with Europe and the world”

The M&A market in 2019

Deal volume in the Dutch M&A market has further increased in 2019 amidst a slowdown of deal volumes in the EU and worldwide. This conclusion is based on semi-annual research by KPMG on the development of the global M&A market.

Deal volumes and values

The number of deals on the Dutch M&A market increased substantially last year. In 2019, a total of 852 transactions took place, 12% more relative to the 760 transactions in 2018. Total deal value increased by more than 60% from €49 billion in 2018 to €80 billion in 2019, partially explained by a few large deals (GrandVision acquired by EssilorLuxottica, Hoofddorp-headquartered Interxion acquired by Digital Realty, the takeover by Takeaway.com of Just Eat and the sale of Eneco to Mitsubishi Corporation). The Dutch M&A market sets itself apart in this regard, as both deal volumes and total deal value decreased on the European and global market.

Valuation levels in terms of median EV/EBITDA multiples have further increased in the Netherlands, from a median of 11.5x in 2018 to 11.8x in 2019. Worldwide valuation levels on the other hand saw a decline in EV/EBITDA multiples from 11.5x in 2018 to 11.1x in 2019, with multiples in the European market showing a similar trend.

Financial investors

Financial investors accounted for a total of 238 transactions in the Dutch M&A market, circa 30% of total deal volume. More than 60% of these transactions related to so-called 'entry investments', whereby a financial investor acquires a company from a non-financial investor. The number of entry investments outnumbered the number of exits (a financial investor selling its portfolio company to a non-financial investor) by 84 in 2019, emphasizing that financial investors in the Netherlands are 'net buyers'. The fact that financial investors, despite the record high valuation levels, still account for circa one third of total Dutch deal volume in 2019 suggests that there is ample dry powder among financial investors.

Cross-border

M&A activity in the Netherlands showed a strong international focus in 2019. A total of 523 cross-border deals was recorded in 2019, 220 of which concerned a Dutch bidder acquiring a foreign target ('import') and 303 transactions in which a foreign buyer acquired a Dutch target ('export'). For circa 40% (329 transactions) both the target and bidder were Dutch ('local'). In 2019, Dutch buyers acquired the most companies in Germany, followed by the US, Belgium, France and the UK.

Leading M&A Adviser

KPMG Deals consistently ranks as the number one M&A adviser globally. KPMG Deals completed almost 400 deals in 2019 cementing its global number 1 position. KPMG firms operate in 84 countries with over 8,200 Deals professionals who are able to meet the needs of clients across the globe.

© 2020 KPMG N.V., registered with the trade register in the Netherlands under number 34153857, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ('KPMG International'), a Swiss entity. All rights reserved. KPMG International Cooperative ('KPMG International') is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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