Prices on the Belgian mergers and acquisitions market remain at record levels

Results of the 2023 M&A Monitor

Mathieu Luypaert

By Mathieu Luypaert

Professor of Corporate Finance

Gianni Spolverato

By Gianni Spolverato

Doctoral Researcher, Accounting & Finance

Tom Floru

By Tom Floru

Researcher, Accounting & Finance

10 May 2023

Despite a decline in the international mergers and acquisitions market, the Belgian market is holding up surprisingly well in 2022. This is mainly due to the smaller and strategic transactions. The average transaction price across all size segments remains at an absolute record high. However, the persistent economic uncertainty is leading to an increased use of deferred payments. The M&A market has become far more professional over the past 10 years, with growth rather than savings as the main motive. A shift from a reactive to a proactive market is expected in the coming years, with the search for targets increasingly crossing national borders. Finally, environmental factors are gaining in importance as a competitive advantage in transactions.


These are the main conclusions of the tenth edition of the M&A Monitor, an annual survey of 155 Belgian merger and acquisition specialists including corporate finance advisers, private equity investors, strategic advisers, bankers and lawyers. They represent all industries and transaction sizes. The survey asks about their experiences of the deals they were involved in during 2022 on the one hand, and their expectations for 2023 on the other. As this was the tenth edition, they were also asked about the evolution over 10 years.

The survey was conducted by Professor Mathieu Luypaert and researchers Gianni Spolverato and Tom Floru of the Centre for Mergers, Acquisitions & Buyouts at Vlerick Business School in collaboration with Bank Van Breda, BDO, Van Olmen & Wynant and Wallonie Entreprendre.

Acquisitions market remains surprisingly stable

Compared with the record year 2021 – in which almost 6 trillion dollars was spent on acquisitions worldwide – 2022 experienced a significant drop. However, despite this decrease of 2 trillion euros, the global mergers and acquisitions market remains at the average level of the past 10 years. 

The picture for the Belgian mergers and acquisitions market in 2022 is not as clear and varies greatly depending on the type of transaction. For medium to large transactions, 50% of the respondents indicate that the market has shrunk. However, when it comes to smaller transactions with a value of less than 5 million euros, only 1 in 3 can see a decrease. When we look at the type of purchaser, the acquisitions by strategic buyers are clearly much more stable than the private equity transactions. 50% noted a sharp decline in financial transactions, while only 1 in 3 respondents experienced the same for strategic transactions.

Mathieu Luypaert, Professor of Corporate Finance at Vlerick Business School:

The first half of 2022 was fairly stable but interest rates suddenly started to rise from the summer onwards, which mainly had a negative impact on the very large transactions. However, Belgium is and remains a market of small to mainly medium-sized deals and the small segment in particular is less subject to the situation on the international capital markets. Here, acquisitions are more likely to be a result of demographic factors or a chance opportunity. The economic climate also had a clear negative impact on the number of acquisitions by private equity players. This is because the rising cost price of debt financing is leading to a drop in the return on financial acquisitions. But overall, we can see that the Belgian market is holding up surprisingly well.”

Valuations remain at record high

In 2022, an average of 6.7 times the EBITDA value (i.e. the operating cash flow) was paid for the acquisition of a company across all size segments; this is the same as in 2021 and 2017 and the highest level since the start of the survey.

  • In the smaller segment of deals with a value of less than €1 million, the multiple even rose from 4.5 to 5; for deals above €100 million, up to 9.1 times the EBITDA value was paid, a slight drop compared to 2021 (9.9).
  • The highest multiples are found in technology (9.4) and pharma (9.2); at the bottom of the list we find retail, logistics and the construction sector (an average of 5).

Mathieu Luypaert: “The fact that acquisition prices are remaining stable and high in a context of inflation and rising interest rates is reassuring news for sellers. We are seeing a significant shift in the deal structure, however, with debt financing falling to a low point in 2022. Either banks have become more conservative when it comes to granting loans for acquisitions, or buyers are making less use of them because the cost price has risen. The turbulent market is also causing an increase in the use of deferred payments as a means of limiting the need for financing. 39% of the transactions involve a ‘vendor loan’, which enables the buyer to pay part of the acquisition price later. And 36% of the transactions are financed through an ‘earnout’, a variable deferred payment that depends on the operating results after the acquisition.

Longer deal process and shift in acquisition motives

  • 60% of transactions were completed within 6 months in 2015, compared to only 40% in 2022. This trend has been visible for several years and appears to be continuing. Deals are taking even longer today than during the Covid period.
  • In terms of motives for strategic acquisitions, economies of scale have remained at number 1 since 2015, while cross-selling and attracting new technologies are alternately at 2 and 3. Here, ‘acqui-hiring’ has undergone a significant increase; attracting talent via acquisition was only number 8 in 2015, compared to 2022 when it was the 4th most important reason for an acquisition.
  • On the part of the financial buyers, the growth in sales and turnover has gained in importance over the years and is now the main driver.

Trends and prospects

  • The respondents indicate that the Belgian M&A market has become much more professional over the past 10 years. Acquisitions also tended to be made from a growth-related perspective rather than with cost savings in mind.
  • Despite the danger of a Belgian sell-off a few years ago, cross-border incoming and outgoing transactions have remained in balance over a period of 10 years.
  • Over the next 5 years, respondents expect more proactive deals in which the buyer actively seeks out the right target; this search will also increasingly take place across the border and data analysis is gaining in importance for identifying potential targets.
  • Whereas ESG has so far mainly been a question of estimating possible risks, the respondents expect ESG measures – and especially environmental factors – to become a truly decisive factor that could even justify a higher acquisition price.

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Mathieu Luypaert

Mathieu Luypaert

Professor Corporate Finance