Having long been absent from major strategic deals, SMBs and SMEs now appear to be playing a key role in the mergers and acquisitions market. In France, the share of transactions involving small and medium-sized companies is increasing significantly. Despite macroeconomic uncertainties, this type of company is still a magnet for investors. Here are some insights from the experts at AURIS Finance, an M&A consultancy.
Known as “Small Caps Deals”, these transactions, involving medium-sized companies with a value of up to €10 million, are becoming increasingly important in the European market. The main reason for this upturn is the retirement of the baby-boom generation, which has led to a wave of sales and transfers of family businesses. According to Bpifrance’s Observatoire de la transmission, 72% of transfers in 2023 are due to retirement, compared with 66% five years earlier. The market is now deeper and there are more candidates for transfer than ever before.
A new context
So what’s happening on the acquiring side? While the global M&A market is currently experiencing a real slowdown, the number of acquisitions of small and medium-sized companies in France and Europe is on the rise. One reason for this is that new, young entrepreneurs are more cautious than their elders. More and more of them are opting to buy an existing business when they start out. Entrepreneurship through acquisition allows the buyer to start a business by immediately securing an order book and production capacity. In addition, issues of corporate responsibility, social commitment, and environmental sustainability are now favouring family-owned businesses with a local presence. Against this backdrop, and at a time when private equity funds are becoming more discerning, transactions involving SMBs and SMEs are attracting investment professionals.
New opportunities
The French market has recently witnessed several notable cases of concentration among SMEs. In the transport sector, the Jacky Perrenot group took over TVC Transports & Logistics, a medium-sized family business with a turnover of €10 million. In the agri-food sector, the Terrena cooperative acquired Tipiak, a family business based in Nantes. Both cases demonstrate the growing trend among SMEs to strengthen their market position through smart mergers and acquisitions.
Consultancy services for every challenge
SMEs now have a wide range of tools and dedicated advisers to help them make the right decisions when it comes to selling their business. For a long time, the difficulty in transferring SMEs was due to the lack of a centralised and transparent market. Today, there are many sources of market comparisons. New digital tools and the development of advisory services are helping business owners make the right decisions.
Our experts at your side
AURIS Finance works alongside company founders and managers. Our experts are specialised by sector and will support you throughout your acquisition or sale. They can also advise you on structuring your financing and finding investors that match your development objectives.
