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5 Benelux M&A trends to expect during the second half of 2019

During the first half of 2019, Benelux M&A totalled €16.9bn, down 27.6% from the previous year. Deal count declined to 349 from 397. We review the 5 trends set to define the next 6 months of dealmaking in Benelux. 

Just 3 transactions broke €1bn including Macquarie Group’s sale of €2.2bn worth of its 36% stake The Brussels Airport Company, Astorg Partners sale of Satellite television operator M7 Group to Groupe Canal+ and NovEnergia II’s trade sale to Total Eren. 

Here are 5 trends expected to affect deal activity for the remainder of 2019:

  1. Deals are taking longer

Suitors are anticipating economic slowdown and tensions between trading blocs so are spending longer performing due diligence and arranging finance. Previously, the end of June signalled the start of summer, but now drawn-out deal processes appear to be spilling over into the second half. 

  1. Valuations are high and can hamper dealmaking

Vendors are chasing top dollar from deep-pocketed sponsors. Eichholtz’s minimum 8x €240m EBITDA price tag is clouding the furniture wholesaler’s auction report sources. Such valuation gaps are hampering deals such as fencing manufacturer Heras’ carve-out from construction materials giant CRH.  

  1. There is a well-stocked pipeline of M&A, but the pace of projects is a lot slower 

Live files include Eneco Group’s blockbuster privatisation, which may top €4bn; Rhone Capital’s €70m EBITDA sale of CSM Bakery Solutions Europe Holding; and Renewi’s divestment of Netherlands subsidiary Reym. Further situations are likely to appear in the coming months. 

  1. Tech deals are at the forefront

M&A value in the technology sector hit €1.8bn bolstered by TomTom’s €910m disposal of its telematics arm to tiremaker Bridgestone Corporation. Vitruvian Partners-owned hosting player Solvinity and Waterland Private Investments-backed cloud computing expert Sentia both look set to be sold this year. FinTech and MedTech look promising as digitalisation disrupts various segments. 

  1. Mid-cap M&A is set to remain brisk 

Traditionally less affected by macroeconomics and geopolitics, digitalisation, the hunt for scale and succession issues are expected to spark manageably priced tie-ups. Buyout candidates include engineering consultancy Lievense Holding, computer wholesaler Easy2rent, and packaging maker, Faster, are attracting private equity attention. 

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