DRAFT
KPMG Global Deal Activity Update
2019 Analysis
KPMG Deals – Corporate Finance
The Dutch M&A market – exception to the rule?
Executive summary
1
— Dutch deal activity has further increased during 2019 amidst the current slowdown of deal activity in the EU and worldwide— Both total deal volume (+12%) as well as total deal value (+63%) increased in 2019 compared to 2018 in the Netherlands, whereas both deal volume and deal value decreased in the EU and on a global level
2
— Financial investors still have sufficient dry powder and investment appetite in the Netherlands, accounting for one third of total Dutch deal volume in 2019— Despite the fact that valuation levels further increased to a record high in over a decade, the number of entry investments is exceeding the number of exits by the highest amount since 2010
3
— The majority (60%) of recorded deal volume the in Netherlands consisted of cross-border deals in 2019, amounting to 523 deals in which a Dutch bidder acquired a foreign target or vice versa— This deal activity underpins the open character of the Dutch economy, in which the minority of all transactions (40%) consists of both the target and bidder being Dutch
4
— Looking at cross-border deals, the Netherlands is a ‘net-seller’ of companies since 2014, reflected by the higher amount of deals in which international buyers acquire Dutch targets compared to non- Dutch targets acquired by Dutch buyers— This demonstrates the quality and attractiveness of Dutch companies, further confirmed by record valuation levels during 2019
Dutch deal activity appears to be late cyclical High investment pressure among PE’s
The Netherlands is an international M&A market The Netherlands remains a net-seller of companies
73% 74% 77% 76% 69% 71% 69% 65% 70% 72%
27% 26% 23% 24% 31% 29%
31% 35% 30%
28%
479 544 503 468 567 576 649 723 760 852
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Strategic deals Financial deals
Snapshot overview of the M&A market in 2019
number of deals
2019 2018 delta
19,965 21,238 (6.0)%
8,203 8,512 (3.6)%
852 760 12.1%
deal value in €bn
2019 2018 delta
3,010 3,021 (0.4)%
843 910 (7.3)%
80 49 63.6%
Europe
Netherlands
76% 73% 72% 76% 75% 74% 72% 72% 72% 72%
24% 27% 28% 24%
25% 26% 28% 28% 28% 28%
5,074 5,763 5,616 5,959 6,884 7,140 7,699 8,200 8,512 8,203
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Strategic deals Financial deals
Note: A deal is characterised as a financial deal if either the seller or buyer is a financial investor Source: Mergermarket – based on announcement date, data per 17-2-2020; KPMG Analysis
Growing Dutch M&A market going against EU and worldwide trends
12,663 13,707 14,138 14,880
17,714 18,462 19,127 20,353 21,238 19,965
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
9.5x 9.7x 9.2x 9.5x 10.3x 11.2x 11.2x 11.8x 11.5x 11.1x
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
5,074 5,763 5,616 5,959
6,884 7,140 7,699 8,200 8,512 8,203
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
9.4x 9.5x 9.1x 9.3x 9.9x 10.6x 10.3x 10.9x 11.5x 10.8x
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
479 544 503 468
567 576 649 723 760 852
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
8.5x 7.8x 8.7x 7.5x
9.0x 11.6x
8.3x
10.5x 11.5x 11.8x
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Global deal volume decreased worldwide with 6.0% and in Europe with 3.6% from 2018 to 2019, whereas the number of deals increased in the Netherlands with 12.1%
Valuation levels in terms of EV/EBITDA multiples have further increased in the Netherlands, to a median EV/EBITDA of 11.8x, while Europe and the global market saw a decline in median EV/EBITDA multiples
number of deals
World
EV/EBITDA multiple
World
Europe Europe
the Netherlands the Netherlands
8.2%
3.1% 5.2%
19.0%
4.2% 3.6% 6.4% 4.3%
(6.0)%
13.6%
(2.6)% 6.1% 15.5%
3.7% 7.8% 6.5% 3.8% (3.6)%
13.6%
(7.5)% (7.0)%
21.2%
1.6% 12.7% 11.4% 5.1% 12.1%
2.3%
(5.6)%
3.6% 8.6% 8.7%
(0.7)% 6.0%
(2.4)% (3.9)%
0.4%
(4.5)% 2.4% 6.3% 7.2%
(2.4)% 5.4% 5.6%
(5.8)%
(8.8)%
11.7%
(13.6)%
19.8% 28.9%
(27.8)%
25.6%
10.2% 1.9%
Note: Displayed analysis concerns median EV/EBITDA multiples
Source: Mergermarket – based on announcement date, data per 17-2-2020; KPMG Analysis
73% 74% 77% 76% 69% 71% 69% 65% 70% 72%
27% 26% 23% 24%
31% 29% 31% 35% 30%
28%
479 544 503 468
567 576 649
723 760 852
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Strategic deals Financial deals
13.6%
(7.5)% (7.0)%
21.2%
1.6% 12.7% 11.4% 5.1% 12.1%
Y-o-y growth (%)
61%
25%
14%
72%
28%
Financial deals remain an important part of overall deal volume in the Netherlands
Looking at the Netherlands, deal volume increased to 852 announced transactions in 2019, a growth of 12.1% from 2018 With 238 deals financial investors accounted for 28% of the total deal volume in the Netherlands in 2019, which is in line with previous years
Looking at financial deals in the Netherlands, financial investors made a total of 144 entry investments, amounting to roughly 61%
of total financial deals in 2019
238
Financial deals 614
Strategic deals
type of deal
split by type of deal - Netherlands (2019)
type of financial deal
split by entry/exit/secondary - Netherlands (2019)
Entry
238 852
total Dutch deals
s
13.6%
(7.5)% (7.0)%
21.2%
1.6% 12.7% 11.4% 5.1% 12.1%
Y-o-y growth (%) 73% 74% 77% 76% 69% 71% 69% 65% 70% 72%
27% 26% 23% 24% 31% 29%
31% 35% 30%
28%
479 544
503 468
567 576 649
723 760 852
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Strategic deals Financial deals
Entry: Financial investor acquires a company from a non-financial investor Exit: Financial investor sells a portfolio company to a strategic buyer (excluding IPOs) Secondary:Financial investor sells a portfolio company to another financial investor
144 entry investments
Exit
60 exits
Entry
34 secondary investments
Source: Mergermarket – based on announcement date, data per 17-2-2020; KPMG Analysis
© 2020 KPMG Advisory N.V., registered with the trade register in the Netherlands under number 33263682, is a member firm of the KPMG network of independent member firms affiliated with KPMG 6
International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks of KPMG International.
74 78 56 65 97 73 116 138 130 144
37 45
42 34
55 76
60
87 67 60
0 50 100 150 200 250
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Exit Entry
37 33
14 31 42 (3)
56 51 63 84
-50 0 50 100 150 200 250
Entry minus Exit
44 7 67 48 45 53 58 74 89 81 59
4 10 9 8 8 12
26 15
13 11 17 3 24 20 19
26 24
19 28
25 22
11 7
23 27
30 27
33 32
10 14
11 18
22 20
30 43
35 49
28 24
21 28
45 35
26 43
48 51
127 142
118 110
175 168 198
252
231 238
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Industrials Technology Business Services
Chemicals & Pharma Media Other
number of financial deals
split by target sectors - Netherlands (2019)
61%
25%
14%
No visible investment slowdown among financial parties in the Netherlands
Within financial deals, roughly 61% of the transactions were related to entry investments versus 25% for financial exits
The number of entry investments in the Netherlands is at the highest level over the 2010-2019 period in the Netherlands. Moreover, the number of entry investments exceeding the exits, so called “net investments” is also at the highest level since 2010, totalling 84 more entry investments than exits in 2019
This increase in net investments demonstrates that there has been no investment slowdown among financial investors in the Netherlands and that these parties still have sufficient dry powder and investment appetite
Throughout the years, targets in the industrial sector have consistently generated the majority of transactions for financial investors. However, technology deals have grown significantly emphasizing the importance of technology in the current economy
number of financial deals
split by entry vs. exits - Netherlands (2019)
37 33
14 31 42
-3
56 51 63 84
-50 0 50 100 150 200 250
Entry minus Exit
type of financial deal
split by entry/exit/secondary - Netherlands (2019)
Entry
238
144 entry investments
Exit
60 exits
Entry
34 secondary investments
Type of financial deal
Note: Technology deal is defined as a deal where a target is active in computer software, computer services, hardware or semiconductors Source: Mergermarket – based on announcement date, data per 17-2-2020; KPMG Analysis
Note: A deal is characterised as Dutch deal if either target or buyer is Netherlands based Source: Mergermarket – based on announcement date, data per 17-2-2020; KPMG Analysis
184 200 222 255 262 303
165 184 193 195 201 220
218 192 234 273 297 329
567 576 649 723 760
852
2014 2015 2016 2017 2018 2019 Local Import Export
Cross-border activity in the Netherlands
total Dutch deals
target & buyer geography
The Netherlands recorded a total of 523 cross-border deals 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”). In 329 transactions both the target and bidder were Dutch (“local”)
Looking at the countries where Dutch buyers acquired foreign assets, Germany ranks as the number one geographic region in 2019, followed by the US, Belgium, France and the UK
Countries eager to acquire Dutch companies in 2019 are the UK, France, Belgium and Germany. In line with previous years, US buyers demonstrated the strongest appetite for Netherlands based assets, acquiring a total of 64 companies in 2019
about KPMG Deal Advisory
For more info please contact:
Danny Bosker – Partner, email: bosker.danny@kpmg.nl, phone: +31 (0)20 656 7767 Mark Zuidema – Partner, email: zuidema.mark@kpmg.nl, phone +31 (0)20 656 8276 Onno Groeneveld – Partner, email: groeneveld.onno@kpmg.nl, phone +31 (0)20 426 2669 A selection of recent accomplishments include:
>8,200
Deal professionals
170
Offices globally
84
Countries
In the Netherlands our practice consist of 200 professionals and we serve a broad clientele of listed and privatecorporate clients, financial investors, as well as governmental institutions.
KPMG Deals acted as the exclusive financial adviser to SCA AB on the sale of SCA Logistics B.V. to Matrans Holding B.V.
August 2019 KPMG Deals
acted as the exclusive financial adviser to Stichting
Saltro on the sale of the company and its subsidiaries
to Unilabs
October 2019 KPMG Deals
acted as the exclusive financial adviser of Argenta on the sale of its Dutch life insurance business to Waard Leven (subject to regulatory
approval)
November 2019 KPMG Deals
acted as the exclusive financial adviser to Reggeborgh and AtlastInvest on the sale of The Sniffers to Intero
Integrity Services
December 2019 KPMG Deals
acted as exclusive financial adviser to a consortium of investors on the acquisition of Dias Software from UNIT4
Bedrijfssoftware
January 2020 KPMG Deals
acted as the exclusive financial adviser to the shareholders of Assai Software Services on the sale of a majority stake to Vortex Capital Partners
January 2020
cross-border deals
target geography for Dutch buyer
cross-border deals
buyer geography for Dutch target
61 59 81 79 106 101
23 21 16 24 14 32
11 24 20 28 26 32
17 14 25 28 24 33
27 32 26 37 41 41
45 50 54
59 51
64
184 200 222
255 262
303
2014 2015 2016 2017 2018 2019
US UK FR BE DE Other
81 88 88 93 90 103
187 2112 187 1614 188 1417
17 18 25 15 20 17
22 26 24 29 28 32
20 19 31 28 37 37
165 184 193 195 201 220
2014 2015 2016 2017 2018 2019
DE US BE FR UK Other
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© 2020 KPMG Advisory N.V., registered with the trade register in the Netherlands under number 33263682, 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. The KPMG name and logo are registered trademarks of KPMG International.