European

M&A Monitor
September 2023
DATA & TRENDS IN THE EUROPEAN M&A MID-MARKET

Edition

2
Introduction
Thank you for taking the time to read this second edition of the European M&A Monitor. This report
consolidates research performed by Dealsuite, the leading European platform for M&A transactions. It
contains statistics and trends for the Western-European M&A mid-market (enterprises with a revenue
between €1 million and €200 million) over the first half of 2023.

Dealsuite surveyed 1,318 M&A advisory firms operating in the M&A mid-market of the UK&I, DACH, France
and the Netherlands.

The aim of this study is to create periodic insights that improve the European market’s transparency and
to serve as a benchmark for M&A professionals. We have been publishing local/regional reports for
several years now, this is the second time we publish this pan-European report, with a focus on inter-
regional differences, as well as similarities. We are convinced that sharing information within our network
leads to an improved quality and volume of deals.

Floyd Plettenberg MSc. EMFC

CEO Dealsuite

© 2023 Dealsuite Research. It is not permitted to use, copy or transfer this document
in any form, without referencing to the source and to www.dealsuite.com.
Table of content

I Transactions 4

II Sector Multiples per Country 8

III AI (Artificial Intelligence) 10

IV Buyers Intent 12

V Risk Appetite 13

VI Outlook 14

VII References 15

VIII Method 16

IX About Dealsuite 17

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 3

I Transactions
Increase in buy and sell-side transactions in all regions.

Figure 1 shows the development of buy and sell-side transactions over H1-2023 compared to H2-2022.

Figure 1. Development
of transactions in H1-2023
Buy-side Sell-side
compared to H2-2022*

UK&I +7% +4%

DACH +9% +8%

France +5% +3%

Netherlands +8% +13%

Average**

Buy-side Sell-side

+7.3% +7%
*Development based on average number of transactions per adviser

**The different percentages per region are equally weighted to get

to a Western European average

The challenging economic situation, partly caused by the rising interest rates and high inflation,
resulted in an average decrease in buy-side transactions of 8.5% over all core regions in H2-2022. The
number of sell-side transactions dropped by an average of 7%. In H1-2023, the number of transactions
seems to have recovered. On average, the number of buy-side transactions increased by 7.3%, while
the number of sell-side transactions increased by 7%.

The most significant increase in transactions was reported in the Dutch market. Sell-side transactions
went up with 13%.

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 4

I Transactions
Figures 2 and 3 show the development of the average number of buy-and sell-side transactions per
advisor since the second half of 2021.

On the buy-side, the French market was first to respond to the challenging economic situation
with the average number of buy-sides per advisor decreasing in H1-2022. The DACH, Dutch and
UK&I markets followed in H2-2022, of which the UK&I suffered the biggest decrease in buy-side
assignments over the projected timeframe. In H1-2023 all markets show a similar recovery.

Figure 2. Development of average buy-side transactions per advisor

15%

10%

5%

0%

-5%

-10%

-15%

-20%

-25%
H2-2021 H1-2022 H2-2022 H1-2023

n UK & Ireland n DACH n France n Netherlands n Western Europe*

*The different percentages per region are equally weighted to get to a Western European average

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 5

I Transactions
On the sell-side, the DACH market noted the biggest volatility. Noting an increase in the average
number of sell-side transactions in H2-2021, with a steep drop in both H1 and H2-2022 followed by
an above average recovery in H1-2023. On average across Western-Europe, the number of sell-side
transactions per advisor seems to be recovering in H1-2023 after a drop in H2-2022.

Figure 3. Development of average sell-side transactions per advisor

15%

10%

5%

0%

-5%

-10%

-15%

-20%

-25%

H2-2021 H1-2022 H2-2022 H1-2023

n UK & Ireland n DACH n France n Netherlands n Western Europe*

*The different percentages per region are equally weighted to get to a Western European average

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 6

I Transactions
Most transactions in the Business Services sector.

The distribution of transactions completed in H1-2023 across sectors is illustrated in Figure 4. There is a
correlation to be expected between the relative size of a specific sector in the mid-market and the
percentage of closed transactions. The biggest increases were noted in the Construction & Engineering
and IT Services sectors. The percentage of transactions in the Construction & Engineering sector
increased from 11% to 13%, while the IT services sector percentage increased from 7% to 9%. Despite a
small decrease compared to H2-2022, most transactions were again closed in the Business Services
sector (17%).

Figure 4. Relative distribution of all

transactions per sector
H2-2022 Difference H1-2023

Business Services 18% -1 17%

Industrial & Manufacturing 15% - 15%

Construction & Engineering 11% +2 13%

IT Services 7% +2 9%

Automotive, Transportation & Logistics 8% - 8%

Software Development 7% - 7%

Healthcare & Pharmaceuticals 7% - 7%

Media & Communication 4% +1 5%

Retail Trade 5% - 5%

Wholesale Trade 6% -1 5%

E-commerce & Webshops 5% -1 4%

Hospitality & Tourism 3% +1 4%

Agri & Food 4% -1 3%

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 7

II Sector Multiples per country
The average EBITDA multiple slightly decreased to 5.1.

Sell-side advisors defined the average EBITDA multiple by industry. The advisors were asked to look back
at the completed transactions in the previous 6 months and to revise the industry multiples from H2-2022.
Figure 5 compares the average EBITDA multiples per region from H2-2022 with the revised multiples from
H1-2023. Figure 6 shows the revised industry multiples for H1-2023.

In H2-2022, the average EBITDA multiple declined from 5.4 to 5.2. In H1-2023, the multiple further declined
to 5.1. Multiples vary between 2.6 (Retail Trade, NL) and 8.7 (Software Development, DACH). This means
that the average price of an SME based on EBITDA can vary greatly, depending on the industry.

When comparing the average EBITDA multiples of the various Western-European countries, it shows the
potential benefits of involving a foreign party in the purchase or sale of a business. Besides a possible
higher selling price, it can also mean finding a transaction partner with a better fit for the business.

Figure 5. Average EBITDA multiple per region (Enterprise Value)

H2-2022 Difference H1-2023

UK&I 5.10 - 5.10

DACH 5.65 -0.15 5.50
France 5.35 -0.05 5.30
The Netherlands 4.70 -0.05 4.65
Western Europe 5.20 -0.10 5.10

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 8

II Sector Multiples per country
Figure 6. Comparison of average EBITDA
multiple by sector (Enterprise Value) United
Kingdom & The
between key Western-European regions
Ireland DACH France Netherlands

Software Development 8.1 8.7 7.6 6.8

Healthcare & Pharmaceuticals 7.9 8.3 7.5 6.2

IT Services 7.7 8.2 7.4 6.5

E-commerce & Webshops 7 6.8 5.6 5.1

Agri & Food 5.6 5.8 5.7 5.5

Business Services 5.2 5.7 5.3 4.9

Industrial & Manufacturing 4.8 5.6 4.9 4.9

Media & Communication 4.3 4.7 4.8 4.1

Hospitality & Tourism 4 5.3 4.3 2.9

Retail Trade 3.6 2.9 4.7 2.6

Wholesale Trade 3.6 4.4 4.2 5.3

Automotive, Transportation & Logistics 3.4 4.4 4.1 3.7

Construction & Engineering 3 5.2 3.9 3.9

Average EBITDA-multiples H1-2023 5.1 5.5 5.3 4.65

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 9

III AI (Artificial Intelligence)
The introduction of AI solutions such as Chat GPT allows for quick access to data and streamlining of tasks.
New ways of working deepen the understanding of potential deal partners in the broader ecosystem and
decrease geographical barriers. Sourcing, screening and scoring deal targets have become a matter of
clicks.

7% of advisors regularly make use of AI to support their M&A activities. The vast majority of M&A advisors
have never used AI to support their M&A activities (70%).

Figure 7. Role of AI in M&A activities in H1-2023 according to M&A advisors

Have not used AI, nor considered it 41%

Considered using AI, but did not use it 29%

Have used AI a few times 23%

Regularly use AI 7%

AI can support in various M&A processes from market research to post-merger integration. On average,
69% of M&A advisors agree that AI will add value to the market research process, where only 4% of
advisors do not think it will add any value in this process. The opinions on the added value of AI in the
legal documents creation/evaluation process are diverse. 27% of advisors think AI will not add any value
in this process, while 37% of advisors believe it will add significant value.

Figure 8. Expected value added by AI

None Little Significant

Market research 4% 27% 69%

Identifying off-the-market opportunities 19% 39% 42%

Faster target evaluation 17% 53% 30%

Efficient Due Diligence process 19% 57% 24%

Legal documents creation/evaluation 27% 36% 37%

Post-merger integration 38% 49% 13%

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 10

III AI (Artificial Intelligence)
More people become familiar with AI and its benefits. Advisors were asked about how they see the role
of AI develop in the upcoming 5 years. The opinions are mixed, on average, 48% of the advisors expect
AI to have a slight impact or no impact at all, while 52% of the advisors expect AI to have a strong impact
or even be indispensable.

Figure 9. Expectations of the role of AI in the next 5 years according to M&A advisors

No impact (not part of common practice) 4%

Slight impact (used occasionally) 44%

Strong impact (used frequently) 36%

Indispensable (indispensable to common practice) 16%

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 11

IV Buyers intent
Decrease in average number of interested parties per firm (7.8).

The overall number of interested parties per firm is high. There is more demand than supply. The current M&A
market therefore remains a ‘seller’s market’. Selling parties are in a luxurious position. The advisory firms were
asked to disclose the average amount of interested parties per offered firm per sector. The ratio for supply and
demand is different for each sector, with an average of 4.2 interested parties lined up for a company within the
Hospitality & Tourism sector and an average of 12.5 interested parties lined up for a company in the Software
Development sector. The results are shown in Figure 10. Compared to H1-2022, the average number of interested
parties over all sectors has decreased from 9.1 to 7.8.

Figure 10. Average number of interested parties per firm in H1-2023

H1-2022 Difference H1-2023

Software Development 13.7 -1.2 12.5

IT Services 13.7 -2.2 11.5

Industrial & Manufacturing 12.0 -2.1 9.9

Healthcare & Pharmaceuticals 10.4 -1.2 9.2

E-commerce & Webshops 11.4 -2.8 8.6

Business Services 10.2 -1.9 8.3

Construction & Engineering 9.3 -1.3 8

Agri & Food 9.2 -2.6 6.6

Media & Communication 7.2 -1.3 5.9

Automotive, Transportation & Logistics 8.1 -2.2 5.9

Wholesale Trade 7.4 -1.7 5.7

Retail Trade 5.0 -0.8 4.2

Hospitality & Tourism 4.1 +0.1 4.2

Average 9.1 -1.3 7.8

*Definition of ‘interested’: Someone who actually contacts the selling party.

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 12

V Risk appetite
Decrease in the risk appetite of strategic buyers.

In the previous M&A Monitor, research was conducted on which buyer type usually offers the highest price
per firm. In 49% of the cases, a strategic buyer made the highest offer. For this edition, M&A advisors were
asked about the risk appetite of those strategic buyers in the current challenging economic conditions.
Half of the advisors report a drop in the risk appetite of strategic buyers in H1-2023. The risk appetite also
impacts the average interested parties per firm (Graham et al. (2010)).

On average, according to 63% of the advisors, the risk appetite of strategic buyers in H1-2023 has
decreased. The DACH region saw the biggest drop in the risk appetite of strategic buyers.

Figure 11. Risk appetite of strategic buyers H1-2023

Significantly decreased 15%

Decreased 48%

Stable 28%

Increased 8%

Significantly increased 1%

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 13

VI Outlook
Advisors have more optimistic expectations for H2-2023.

Assessing the performance of the Western-European M&A mid-market is based on many factors,
including the willingness of entrepreneurs to sell their businesses, funding availability, macroeconomic
developments etc. An interpretation of these factors is needed to determine how the market will
develop. The survey included both assessments of the M&A mid-market in H1-2023 (retrospective) and
H2-2023 (projection).

The opinions about the past six months are mixed. On average, half of the advisors (49%) look back at
H1-2023 with a dissatisfied feeling. 51% of advisors were satisfied with the performance of H1-2023.
The expectations for the second half of 2023 are more positive, on average, 66% of the advisors have
optimistic expectations for H2-2023. Advisors in the UK&I region have the most optimistic expectations
for H2-2023. 72% of advisors reported optimistic expectations. 54% of French advisors share those
expectations.

Figure 12. Retrospect of H1-2023

Very positive 1%

Positive 13%

Slightly positive 37%

Slightly negative 36%

Negative 9%

Very negative 4%

Figure 13. Expectations for H2-2023

Very optimistic 3%

Optimistic 13%

Slightly optimistic 50%

Slightly pessimistic 25%

Pessimistic 8%

Very pessimistic 1%

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 14

VII References
In addition to Dealsuite’s assistance in
approaching the market and selling our
clients’ businesses, we additionally gained a
mandate to represent Reelway GmbH
thanks to our Dealsuite membership.
Markus Schlich
Partner
Kensington Mergers & Acquisitions
As a group, we have recently completed
our 16th acqusition with a number of
these acqusitions introduced to us via our
partnership with Dealsuite. We value the
efficient service for identifying and
contacting relevant targets.
Sameer Rizvi
Founder & CEO
RDCP
DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023
Dealsuite digitalises internal
communication within our globally
active company. Already 26 Grant
Thornton M&A practices in different
countries are using Dealsuite. This
definitely strengthens our capabilities
to find the right acquisition targets or
buyers for our clients.
Evert Everaarts
Partner
Grant Thornton NL
Even though the start of the pandemic
had delayed a great number of M&A
transactions, now that the deal activity
has picked up, the M&A activity is stronger
than before the pandemic.
Hervé Camus
CEO
Atlantic Finance
15
VIII Method
The majority of M&A transactions takes place in the mid-market. This M&A Monitor uses the definition of
a mid-market company as having a revenue between 1 and 200 million euros. The survey that was the
basis for this M&A Monitor was sent to 1,318 M&A advisory firms. Considering their combined input, they
represent an essential part of the M&A mid-market in Western-Europe. Out of the total of 1,318 advisory
firms, we received in total 480 responses (36.4% response rate).

Sources used:
• 480 survey responses from key Western-European M&A advisory firms
• Dealsuite M&A Monitors 2015 - 2023
• Dealsuite transaction data 2015-2023
• Damodaran (2011). Equity Risk Premiums (ERP).
• Graham, J., Harvey, C., Puri, M., 2010. Managerial Attitudes and Corporate Actions.
Working Paper, Duke.

This research was conducted by Jelle Stuij, Bjorn Brenninkmeijer and Roos Bijvoet. For further questions,
please contact Maarten Reinders, CCO Dealsuite.

Maarten Reinders
CCO Dealsuite

Dealsuite
Science Park 106 +31 20 303 8731
1098 XG Amsterdam maarten.reinders@dealsuite.com
The Netherlands www.dealsuite.com

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 16

IX About Dealsuite
Dealsuite is the largest European M&A network. Dealsuite was founded by and for M&A professionals.
They realised that a lot of time and costs that are incurred during the process of finding the right buyer or
seller can be saved by making use of online networks. Dealsuite enables M&A professionals to
communicate with each other easily and securely via a state-of-the-art platform. Dealsuite is offered as a
plug-and-play SaaS solution, making it very user-friendly. Thanks to the commitment of our renowned
customers and our excellent reputation, the Dealsuite network is rapidly expanding. Currently, Dealsuite
is active in 50+ countries, with over 1,400 M&A advisory, private equity firms and corporate M&A teams
connected. We are looking forward to welcoming you and your company to our community.

Visit us at www.dealsuite.com for more information.

DEALSUITE EUROPEAN M&A MONITOR SEPTEMBER 2023 17