M&A activity in the floriculture sector at a stationary pace
M&A Developments | Floriculture | H1 2023
In line with our expectations, the floriculture sector experienced relatively slow dealmaking activity in the first half of 2023.
We have identified 46 transactions during the period, which is relatively consistent with the 49 transactions observed in the second half of 2022 and considerably lower compared to the 56 transactions observed in the first half of 2022, for reasons discussed in the previous edition.
The steep increase in energy prices has been one of the main drivers contributing to the decline in M&A activity. However, energy prices have decreased since and the M&A environment is expected to improve. We are already witnessing the revival of several sale processes that were put on hold last year.
Nonetheless, uncertainties persist regarding future energy prices, a potential upcoming recession and low consumer confidence. Additionally, funding for M&A transactions remains limited. Therefore, while we expect an improvement in deal activity compared to the first half of the year, it is unlikely deal activity in the second half of 2023 will reach pre-Ukraine war levels.
Now that the turmoil surrounding the high energy prices is fading away, we are seeing a gradual return of optimism across most segments. Company owners and management teams are rekindling their M&A strategy discussions, signaling a renewed wave of consolidation in the floriculture sector after a brief interruption.Frank de Hek, Oaklins' horticulture specialist
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