Consolidation Is Keeping M&A Dealmakers Busy in Benelux

After taking a summer holiday to rest, regroup and recharge with family and friends, mergers and acquisitions (M&A) dealmakers in Benelux are bracing for what will be a busy close to 2021.

The temporary pause in dealmaking brought on by the COVID-19 pandemic at the start of 2020 is now in dealmakers’ rear-view mirrors. Buyers are vying for the most enticing assets and deals are happening at light speed in a seller’s market.

Amid a highly competitive landscape, M&A deals are moving fast due to several drivers right now. Sectors to watch over the next quarter are Logistics, Industrials and TMT.  

The hunt for deals

With their coffers flush with record amounts of dry powder, private equity (PE) firms are mightily competing against corporates for attractive targets in Benelux. Consolidation across many industries began once government schemes aimed at helping businesses that were impacted by lockdowns came to an end. The momentum shows no signs of slowing down.

Environmental, social and corporate governance (ESG) is playing a major role in dealmaking during the due diligence process. Successful companies are building ESG into their M&A playbooks and determining risk early on in the process.

Valuations are high but deals typically have an extremely limited number of buyer groups — it is bilateral in most cases as buyers are directly approaching sellers. Consequently, deals are often beginning at short notice and having shorter due diligence periods.

There have been many initial public offerings (IPOs) in the territory. In the Netherlands, the big switch from the London Stock Exchange to Euronext Amsterdam has not resulted as expected as a lot of IPO deals are still managed by the London market. But don’t count Amsterdam out as the financial hub is catching up.

Help wanted

One of the main challenges I’m hearing about is the need for experienced dealmakers to work on transactions. Simply put, there aren’t enough mid- to senior-level professionals to manage the steady wave of transactions. The same holds for financial and legal advisors, and we have been seeing a number of those working at corporates moving to advisory. 

To find out more about what lies ahead for M&A in Benelux and the world beyond, download the Q4 2021 SS&C Intralinks Deal Flow Predictor. This edition — which you can download here — features the coming quarter’s market prediction as well as a timely spotlight on inflation’s impact on M&A.