• Back from never (quite) gone

    M&A Monitor Results 2022


Back from never (quite) gone

18 May 2022

M&A Monitor Results 2022

Global M&A activity reached an all-time high in 2021 and rebounded strongly from a brief decrease during lockdown in the first half of 2020. The results of the M&A Monitor 2022 don’t lie. According to the first quarterly figures of BDO Belgium, the recovery continues unabated in 2022.

What do we mean by recovery? What does this mean for Belgian buyers and sellers? How strong will this boom last in a world that’s currently governed more by uncertainties than certainties? We asked four experts:

  • Alexi Vangerven, Partner Corporate Finance BDO Belgium
  • Jan Oosterlinck, Partner Financial & Family Business Advisory BDO Belgium
  • Mathieu Luypaert, Professor in Corporate Finance – Head of Centre for Mergers, Acquisitions & Buyouts – Vlerick Business School
  • Gianni Spolverato, Doctoral researcher Centre for Mergers, Acquisitions & Buyouts – Vlerick Business School

Download the Vlerck M&A Monitor 2022 here

The great added value of the M&A Monitor? It objectifies the price expectations of both buyers and sellers.

The M&A Monitor shows that 2021 was a great year for global M&A activity?

Gianni Spolverato: “Last year, the global M&A market reached an all-time high of USD 5.9 trillion - in 2019 it was still around USD 4 trillion. In our country, 73% of the surveyed experts report a significant increase in the number of mergers and acquisitions compared to 2020 and 26% even speak of an increase in their M&A transactions of more than 20%. The jump is strongest in the segment of the largest deals, while it is more moderate for smaller transactions. Despite these strong figures, Belgium is following the global record growth less closely because our (small) country is less market-sensitive.”

Mathieu Luypaert: “That record volume should not come as a surprise. Both private equity firms (PE’s) and strategic investors built up capital buffers during the COVID-19 pandemic and are now trying to put that abundance of cash to good use. At the same time, other factors such as the economic revival and growth, the restored confidence of CEO’s, booming capital markets and low interest rates are providing fertile ground for sector consolidation through strategic acquisitions. Finally, in 2020, under the pressure of the pandemic, a number of transactions were postponed and picked up again last year.”

Evolution M&A transaction 2021 in Belgium

Source: M&A Monitor 2022 Vlerick Business School

In Belgium, the search for private equity investment opportunities even exceeds capital-seeking start-ups, scale-ups or mature companies?


Alexi Vangerven: “That’s true. Companies that came out of the pandemic stronger or proved to be corona-proof because of the sector they operate in (pharma, healthcare, technology companies, etc.) or because they were able to adapt quickly to the new market conditions are particularly sought after. The search for good dossiers results in a bidding process among the candidate buyers.”

“A company that withstood the corona pandemic is resistant to anything and makes it an attractive candidate for buyers.” - Alexi Vangerven, Partner Corporate Finance BDO Belgium

Mathieu Luypaert: “However, now that the peak of corona is behind us, we are again noticing more interest in those companies that were struggling at the time (commodity, hospitality, tourism, event, ...) but are now generating positive cash flows again. Also, sectors where the consolidation wave had already started, such as automotive, home automation and digital marketing, are picking up where they left off.”

In other words, scale and market leadership are important levers for the M&A market?

Alexi Vangerven:“More than ever, globalisation is causing more and more companies to expand their markets beyond their national borders. In the wake of this evolution, more foreign PE’s are approaching the Belgian market. They are looking more to family businesses with a loyal customer portfolio. After all, there are still many companies within that group whose growth potential remains under-exploited. The financial injection and the experience of a PE often provides the turbo engine that is needed to achieve this.”

Jan Oosterlinck: “Many capex-strapped family businesses are under pressure to invest in digitalisation and sustainable business. Or are looking for the means to step into the equity as the next generation. Or they are forced by labour shortages to automate processes and that is impossible in a profitable way without scale, ditto sufficient financial resources.”

Until 2019, we mainly experienced a seller's market (it was very attractive to sell). Since 2020, we have noticed that it has become more attractive to buy. Did this trend continue in 2021?

Mathieu Luypaert: “In 2020, it was indeed expected that, due to the corona problems, we would move from a seller's market to a buyer's market. That didn’t happen. Today, we are still in a market that favours sellers. The demand for companies that want to merge or are open to acquisition still far exceeds supply. Hence the current, historically high takeover prices.”

Alexi Vangerven: “Not only PE’s, but also strategic investors are in demand and are looking for consolidation opportunities from a 'buy & build' and/or diversification strategy. Whereas at BDO we used to have a ratio of 80% sales mandates and 20% buy mandates, this is now about fifty-fifty.”

Jan Oosterlinck: “Risk management is much more prominent today than it was two or three years ago. Diversification has become an important driver. Companies are trying to become much less dependent on one specific sector, product group or region.” 

What about the traditional financiers, the banks? During the corona crisis, they became more cautious. Did their risk appetite increase again?

Jan Oosterlinck: “I notice that banks have become more selective in the choice of their dossiers and sectors. The risk analysis goes much deeper. The number of questions they ask increases day by day. In booming periods, on the other hand, they ask far fewer critical questions.”

Gianni Spolverato: “The figures of our monitor don’t show a decreasing borrowing capacity. We do see shifts within the sectors. For example, banks are less inclined to grant debt or acquisition financing to the event sector or to small retailers. Deal structures remained relatively stable, despite a slight decrease in the use of earn-outs and vendor loans. Due to increasing uncertainty, vendors want to get cash on the barrel. And because demand is outstripping supply, sellers can make their demands.”

“With growing uncertainty, the seller wants cash on the barrel.” - Gianni Spolverato, Doctoral researcher Centre for Mergers, Acquisitions & Buyouts Vlerick Business School


Alexi Vangerven: “PE’s keep insisting on a key management buy-in - a matter of keeping operational know-how on board during the war for talent. Most PE’s are reluctant to take over real estate, because that’s capital with a lower return. In deals with a lot of competition however, they are more willing to take over real estate. By making this gesture to the seller, they hope to shake off the competition.”

Also noteworthy, the age of the sellers is dropping?

Jan Oosterlinck: “The reason why financial investors focus on the 40-year old managers is twofold. On the one hand, they are looking for someone who still wants to actively lead the next growth phase of the family business. By doing so, they also secure the operational know-how, experience and strength. On the other hand, they are offering this generation the chance to secure a part of the capital accumulated in the family business now and to grow professionally.”

Alexi Vangerven: “The advantage for the seller? He is much more confident at the age of forty, because he still has a whole career ahead of him. In contrast to people in their sixties, he doesn’t have his back against the wall.”

Does the boom in the M&A market have an impact on the way valuations are done? After all, the figures now are more reliable, whereas in times of corona they gave a distorted picture of reality?

Mathieu Luypaert: “Our research results confirm that we have been on a plateau for years. Today, the average enterprise value/ebitda multiple is 6.7 (in human language: 6.7 times the operating cash flow) so slightly more than the 6.4 of 2020. It ranges from 4.5 for targets worth less than EUR 1 million to an average of 9.9 for deals worth more than EUR 100 million. By the way, the multiple of 6.7 is significantly higher than the multiple of 5 in 2013, when we started our research.”

Evolution multiples 2013 > 2021

Source: M&A Monitor 2022 Vlerick Business School

Alexi Vangerven: “The greater the competition, the higher the bids. That's just the game of supply and demand.”

Mathieu Luypaert: “That's precisely the great added value of our M&A Monitor. We objectify the price expectations of both buyers and sellers within the various deal size segments.”

Expectations for 2022 are tempered by geopolitical tensions, the explosion in raw material prices, supply uncertainty, fast-growing inflation and rising long-term interest rates.


Jan Oosterlinck: “While the surveyed experts expect stable M&A activity in Belgium in 2022, the banks are, as mentioned, tightening their risk analyses. Geopolitical and supply risks are weighing more and more heavily in this respect. Five years ago, these kind of risks were hardly on the agenda.”

“Geopolitical and supply chain risks are weighing more and more heavily in banks' risk analyses.”  - Jan Oosterlinck, Partner Financial & Family Business Advisory BDO Belgium




Alexi Vangerven: “Due to increasing uncertainty, potential sellers are becoming more aware that their situation can turn very quickly and that’s why they are opening up to a sale more easily. Geopolitics, commodity prices, food nationalism, etc. are important catalysts here, as is the current wave of consolidation. Because before you know it, as a local or regional player you are faced with new foreign competitors that didn’t manifest themselves until recently. Or that weren’t even on the scene yet. The (buy&build) buyers in their turn are also starting to think about the advantages of nearshoring, but this isn’t being translated into concrete proposals yet.”

How does ESG become more impactful in the valuation of a company?

Mathieu Luypaert: “ESG is a vital aspect of doing business today. Yet the surveyed experts indicate that they only took ESG factors into account in 35% of all strategic takeovers. Private equity scores better with 49% of all transactions, although only 38% of the Belgian private equity investors that were surveyed have a formal ESG investment policy. Environmental impact also appears to be more critical in M&A decisions than social and governance factors.”

Gianni Spolverato: “The motivation clearly differs between the strategic investors and the PE’s. The latter mainly take into account the long-term value creation driven, for example, by consumers who are increasingly demanding in terms of sustainable and social standards. While strategic investors approach ESG compliance primarily from a reputation management perspective.”

Jan Oosterlinck: “The importance of ESG may already be maturing in the minds of investors, but today we rarely see it pop up in due diligences, and family shareholders are only just starting to think about it. Everyone is still looking for how to objectively integrate ESG criteria in the value proposition to the market. The banks are only now taking the first steps towards questioning entrepreneurs about their vision of sustainability, let alone being able to measure and monitor ESG compliance, especially in the mid-market segment. Regardless, it is my belief that ESG will become a determining factor in the M&A business by 2023.”

Mathieu Luypaert: “My message to anyone who wants to bring their company to the market within five to ten years: make sure your company meets ESG standards!”

“To those who want to put their company on the market within five to ten years: comply with ESG standards!”  - Mathieu Luypaert, Professor in Corporate Finance Vlerick Business School


Don't miss out on opportunities as a family business

Family businesses are a sought-after target group for both private equity firms and strategic investors. As demand far outstrips supply, this market situation offers many opportunities for family businesses to successfully address a number of challenges they face, such as:

  • the absence of a successor within the family;
  • giving the incumbent management the opportunity to take over the role;
  • the need for an intensive investment programme to realise the digital transformation and sustainability goals of the business model;
  • to build a platform for further expansion and diversification;
  • increase the scale in order to remain competitive in the future;
  • allow the next generation to step into the equity in a financially viable way;
  • ...

Despite this favourable market situation, family businesses don’t map out their opportunities adequately, which means that they miss out on them. The advice of our BDO experts to family business managers is as follows:

  • Start in time with thinking strategically about the future.
  • Get help from an independent third party to map out the various possible scenarios and to properly assess the impact of each one. The possibilities are endless: from a transfer within the family, to attracting one or more shareholders, or from a management buy-out to a complete sale.
  • Whatever choice the family makes, good preparation and step-by-step planning are essential to realise a smooth transition that takes into account both the interests of the company and family expectations.

About the research

The results of the M&A Monitor 2022 are based on the online responses of 197 Belgian M&A experts, collected between 7 February and 5 April 2022. This sample of M&A professionals was drawn from the professional network of Vlerick Business School and that of the partners of the Centre for Mergers, Acquisitions & Buyouts, complemented by online research. The survey was extensively tested and verified by practitioners and academics. 

The Monitor distinguishes different categories, ranging from deals with a transaction value of less than EUR 1 million to deals worth more than EUR 100 million. 

Is it time to take over a company? Or do you want to sell (part of) the company or leave it to management or a third party? Does your bank recommend an IPO... or are you looking for extra capital to finance your growth? Our experts can guide you. Contact our ‘M&A’ team.