Buyers and sellers often estimate business value up to 2.5 times lower in Utrecht, January 19, 2022

Buyers and sellers often estimate business value up to 2.5 times lower in Utrecht, January 19, 2022 This is apparent from the new SME Takeover Monitor that has been developed by Hogeschool Utrecht in collaboration with acquisition platform Bedrijventekoop.nl.

Importance of an advisor:

Co-initiators Edwin Weesie and Lex van Teeffelen of Hogeschool Utrecht state: “A striking result is the fact that the buyers and sellers assign a different value to the company than the acquisition advisors. This can be as much as 2.5 times lower than the value that acquisition advisors assign to the company. In addition, it is interesting that the respondents of the survey who are active in small businesses (up to 10 employees), indicate that they consciously do not use an acquisition advisor because of the costs or the expected lack of added value. The research also shows that they subsequently find other matters important in a valuation than the specialists and that they also have little knowledge of (tax) takeover schemes.”

Creating the right expectations:

Monique Denis, director Bedrijventekoop.nl states; “Often the first thing an entrepreneur wants to know when he thinks about business transfer is what his company will deliver. It is then very important that they get a fair picture of the company value in order to create the right expectations. Many sellers often do not know which factors are important for the valuation of their company. They are based on rules of thumb or a market-based valuation, but these are usually not sufficient for this target group. This leads to wrong expectations. With this monitor we also want to create clarity and transparency for these entrepreneurs.”

The SME Takeover Monitor:
From various angles, there appears to be a need for pure, transparent information for buying and selling prices in SMEs. There was a lack of insight, especially for the market for deals between 100,000 and 5 million euros. The majority of Dutch companies are located in this segment. This was the reason for Hogeschool Utrecht and Bedrijventekoop.nl to develop an SME Takeover Monitor in which buyers, sellers and takeover advisors are asked about the deal(s) they have made and the information about these deals. With this information, a prospective seller can gain a better understanding of its market value.

The SME Takeover Monitor is presented twice a year to buyers, sellers and takeover advisors, asking for details about the transaction(s) in addition to the characteristics of the company. The research has been set up in such a way that it can also be carried out in other countries in Europe in due course. This creates a clear picture of the differences and similarities in the European market for business takeovers in SMEs. The results of the research from the end of 2021 in the Netherlands can be accessed via the website www.mkbovernamemonitor.nl