Vlerick Expertise in Accounting & Finance

The Belgian mergers and acquisitions market gradually seems to be reaching its peak. It is not just the number of transactions but also the selling prices which rose for the fifth year in a row in 2017. The highest valuations are found in the real estate sector followed by pharmaceuticals, technology and healthcare. The demand is greater than the supply and competition is increasing. In addition, more and more foreign players are showing an interest in Belgian companies. In view of the anticipated further growth in 2018, there is a danger of overheating. These are the main conclusions of the M&A Monitor, an annual survey which involves over 150 Belgian mergers and acquisitions experts and advisers.

Many family businesses aren't making full use of the potential of private equity. Is it because they fear what they don't know? Or are they worried that bringing a financial investor on board will be like inviting in a Trojan horse? A ‘meeting of minds’ between Professors Sophie Manigart and Miguel Meuleman, Dr. Jeroen Neckebrouck and Koen Dejonckheere, the CEO of investment company Gimv.

In contrast to a decreasing trend on the international mergers and acquisitions market in 2016, the Belgian M&A market has experienced further growth, particularly with regard to medium-sized and smaller deals. The demand exceeds the supply. Although transaction prices are rising, they are still acceptable. Anyone wishing to sell a profitable business these days can easily find a buyer. This can be explained by the fact that bank financing has become easier, as well as increased interest by foreign players in Belgian companies.

2015 and the beginning of 2016 were characterised by a pronounced increase in the number of transactions in the Belgian mergers and acquisitions market. Demand is greater than supply, stimulated by easy and cheap access to finance and greater availability of financial resources to investment companies. Furthermore, the persistently low interest rate environment means there is increased interest from family investors, wealthy individuals and foreign private equity funds in Belgian medium-size enterprises. It is therefore not surprising that the prices paid are increasing across all sectors and business sizes. These are the findings from a survey of 142 Belgian mergers and acquisitions experts into their experiences over the past year.

‘Keep it in the family.’ The time-honoured motto of family companies has applied less and less in recent years, and that includes their funding. All around us we see increasing transparency and openness to the outside world, and family companies today are not immune to this. Recent research in cooperation with our Chair Partner Gimv provides a nuanced picture of family companies and their attitude to private equity.

The Alfacam Group was a Belgian company that provided facilities and services for television and production companies between 1987 and 2013. This case portrays the turbulent history of Alfacam, beginning with its inception in 1987, its IPO in 2007 and the failed takeover attempt by Hinduja Group in 2013.

There is no doubt that imitation is a typically human trait. From birth onwards, we learn by imitating. Imitation is also a key learning and decision-making mechanism in the world of business. There are a number of studies on imitation in business decisions with regard to investments, organisational structures or the location of branches, for example. However, the role of imitation in the choice of management control systems and supply chain partners has not yet been researched. Evelien Reusen’s PhD serves to remedy this.

How do unlisted companies – starters and rapidly growing businesses – finance their growth? How are their potential transfers or buyouts financed? And what impact do financing choices have on their continued development? At the request of the Belgian Federal Science Policy Office, a team of researchers from a number of different universities has been examining these questions. Professor Sophie Manigart was the project leader. Below, she comments on the key results that emerged from the study.

Research literature is awash with studies that describe how angel investors are involved in their portfolio ventures and the various value-adding roles they take on. But how the very nature of their involvement actually influences ventures’ performance, particularly their innovativeness, has so far not been addressed. This research paper examines how task conflicts between angel investors and entrepreneurs are related to the innovativeness of the portfolio companies in question and how this relationship is moderated by the level of agreement on priorities, diversity of entrepreneurial experience, and communication frequency.

Why are some merger and acquisition (M&A) deals closed relatively quickly while others take much more time? The answer to this question is important, because prolonged deal duration is costly and postpones realising synergy gains.