Private Equity: Time to Shine

Private Equity, The Netherlands | Report | Q4 2024

M&A activity in the Netherlands in 2024 finished off strongly in a challenging dealmaking environment.

M&A activity in the Netherlands

In 2024, M&A activity in the Netherlands demonstrated a strong recovery after a very slow start in Q1. The last quarter of 2024 finished off on a high note with a total of 296 deals, representing the most active quarter since Q1 2023. Despite a 3% year-over-year decline in deal volume (1,075 in 2023 compared to 1,044 in 2024), the performance in 2024 was largely comparable to 2023, especially when excluding Q1. This signals strong resilience of M&A activity in the Netherlands despite challenging dealmaking conditions.

Improving deal appetite from strategic buyers, as evidenced by the record-breaking 244 strategic deals completed in Q4 2024, was one of the main reasons 2024 was concluded with a bang. This represents the highest quarterly total in the past three years, underscoring renewed confidence among strategic buyers. On the other hand, Dutch PE activity showed a strong increase in the second half of 2024, with PE involvement increasing by 30% compared to the first half of 2024.

Looking towards 2025, we expect a promising M&A year on the back of stabilizing financing markets, ample dry powder at PEs, and technological advancements & AI integration bolstering M&A in these asset types. We expect PE involvement to maintain its upward trajectory in 2025, in both acquisitions and exits, as the past few years have built up a backlog of PEs seeking to exit.

European leveraged finance market

The debt market for leveraged borrowers has seen a dynamic year, marked by record-breaking activity, declining interest rates and shifting economic conditions. For private equity professionals and business leaders in the Netherlands, understanding these trends is vital to navigating the current landscape and seizing available opportunities. This update explores the state of leveraged loans, economic indicators, and key themes shaping the debt market for 2025.

Institutional loan activity in 2024 totaled a record €207bn, surpassing the previous high of €158bn set in 2017. Strong investor demand, driven by a supply shortage of new leveraged loan instruments, has fueled this growth. Notably, €79.4bn of loans were repriced across three distinct waves, dwarfing the prior record of €33.7bn in 2017. Borrowers also capitalized on the opportunity to extend maturities for €19.6bn of debt.

PE involvement is still on the rise and remains an important driver for the Q-on-Q growth in announced transactions. On the other hand, this activity is mainly on the buy-side—both in new platforms as well as in the execution of buy-and-build strategies, with PE exits remaining historically low. Looking at the different size brackets, we see that upper midmarket transactions are on the rise, representing a modest increase in deal volume compared to the previous quarter. Our outlook for the remainder of 2024 and 2025 remains consistent: we anticipate a positive development in M&A activity. While not underestimating the potential impact of geopolitical tensions and uncertainties, we foresee a positive environment for strong M&A activity. Not only because of more certainty in the economic situation, inflation and interest rates, but mainly because postponed (PE-) exit processes will boost M&A activity in the future. TIJN BASTIAANS, PRIVATE EQUITY COVERAGE

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