Private Equity: Back in Business

Private Equity, The Netherlands | Report | Q3 2023

Strong drop in M&A activity, although private equity remains stable

After experiencing a robust M&A market in the first half of 2023, deal volume declined significantly by 16% in Q3 2023, showing signs of a cooling down M&A market in the Netherlands.

M&A activity in the Netherlands

The volume of PE-related transactions remains relatively consistent, showcasing the strong resilience of Dutch PE firms.

When examining deals in terms of deal size, it can be concluded that the share of €5m-€50m and €50m-€100m deals have remained relatively stable in Q3 2023.

Looking into 2024, we believe the downfall in the number of deals is a temporary trend and anticipate a catch-up in the Netherlands. Deals shelved will be dusted off and private equity firms will catch up on exiting their investments.

European leveraged finance market

The year 2023 is on track to be one of the most disappointing years for debt issuance in the last decade. The total volume of newly issued debt is currently at one of the lowest points for this time of the year, as the market has been greatly affected by the invasion in Ukraine.

The tense market-sentiment is demonstrated by the decline in highly-leveraged deals, a decrease of overall EBITDA-multiples paid and an increase in defaults and restructurings in the European large-cap segment. In the Dutch mid-market, however, we notice little of these negative developments yet.

In addition, we presented our view on the rising number of business struggling financially in the Netherlands as a consequence of the tax authorities collecting COVID-debts.

After a strong H1 2023, the third quarter of the year marked a cooling down of the Dutch M&A activity, which is in line with what is generally been said. Surprisingly however is that this drop can be fully attributed to the activity of strategics. PE activity remained at normal levels. FRANK DE HEK, PARTNER

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Frank de Hek Amsterdam, the Netherlands
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Martijn de Win Amsterdam, the Netherlands
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Bas Stoetzer Amsterdam, the Netherlands
Partner Debt Advisory
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Gerbrand ter Brugge Amsterdam, the Netherlands
Partner Equity & ECM Advisory
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