Relative strangers in the Benelux

Belgium, Luxembourg and the Netherlands form the Benelux Economic Union, but when it comes to deal-making, that’s all they have in common. Mark Dunne reports

Belgium, Luxembourg and the Netherlands form the Benelux Economic Union, but when it comes to deal-making, that’s all they have in common. Mark Dunne reports

No one could accuse Bart Houben of sitting on his hands during the second quarter of the year. The corporate investment manager at GIMV approved €36 million (£28.6 million) worth of deals in Belgium between April and the end of June for businesses such as food company Scana Noliko.

The private equity and venture capitalist’s investments in its home country amounted to 67 per cent of its €53.6 million total spend during that period, up from €47.2 million 12 months ago.

But these figures are hiding the real story. The firm only made two direct deals as the funds were also used to make follow-on and third-party investments. The situation has since deteriorated, with the primary investment market slowing even further at the start of the third quarter.

“Recently it has gone rather quiet,” Houben says. “There are not many deals of between €20 million and €100 million in Belgium at the moment.

“Normally, we get a lot of deal flow from family businesses, but I assume that they are hesitating to act in the markets due to the economic climate.”

He adds that it is not only the supply of suitable businesses that is bringing deal-making to a halt, but a lack of financial support. “It is more difficult to get bank funding, especially in Belgium because we work with Fortis, which has its own problems to deal with.”

Going Dutch

Figures released by M&A analyst Zephyr show that there were 84 deals written by Belgian companies in the second quarter, worth an announced €1.3 billion, down from almost €3 billion for the 93 transactions in the opening three months of the year.

But in fellow Benelux country the Netherlands it’s a different story. Statistics show that 193 deals were made by Dutch acquirers between April and the end of June, worth €96.3 billion in announced values.

Houben agrees with Zephyr’s claim that there is more activity in the Netherlands than in Belgium as his Dutch colleagues tell him that they are seeing usual deal-flow levels.

“They depend less on family-owned businesses,” he added. “The Dutch market is a more international, professional market. They have been working with less emotional companies in the past 12 months.”

Marcel van de Vorst, a partner at law firm Norton Rose in Amsterdam, confirmed that the mid-market in the Netherlands is “quite active” and that there are “a lot of deals” coming into the office.

He says that private equity is driving deal-making in the country by making money available for companies wishing to grow. “We saw a little bit of a slowdown over the summer holidays, but everybody is now back to work and picking things up.”

Van de Vorst doesn’t understand why the Netherlands is continuing to perform well when other economies are suffering, but this is not the first time this has happened.

“We saw this during the downturn of 2000, when activity remained quite high in the Netherlands. We saw the effects of the dot-com bubble burst two years later than the UK. To be honest I don’t know why that is.”

The third way

Luxembourg doesn’t focus on M&A as much as Belgium and the Netherlands.

“Luxembourg is more of a tax haven,” Van der Vorst explains. “There is some competition between the Netherlands and Luxembourg about where a company should structure a specific transaction.”

In the first six months of the year, there were only 76 deals completed in Luxembourg, worth an announced €9.8 billion, with March’s 18 deals
the highest volume in a single month. Last year there were just 161 transactions in the country, worth €17.8 billion.

The Benelux may have been formed as an economic union in 1960, but this tie-up does not make a positive contribution to deal-flow in the region.

Houben believes that being part of the EU is more important for Belgium than being in the Benelux. “It doesn’t have economic influence because having the capital of Europe here has a much greater impact.”

Van der Vorst shares his opinion, claiming to have only occasionally worked on deals involving Belgian companies.

For Houben, predicting how his market will develop during the upcoming year is difficult. “The summer is usually quiet, but this year the effect is enlarged. So I assume that after the summer the deal market in Belgium will be reactivated.”

But van der Vorst is under no illusion as to how active his team will be for the rest of the year. “There is a lot of activity in the energy market and there is also consolidation, so our pipeline is going to last us until the year-end.”


Du Pon & De Bruin

NoorderHuys Participaties, a mid-market private equity firm, became the majority shareholder in one of the Netherlands’ largest distributors of private-label ladies underwear in March.

It now holds a controlling interest in Du Pon & De Bruin after agreeing a deal with its management team for an undisclosed sum.

Ben de Graaff Tapijt

In June, carpet and floor coverings retailer Carpetright completed the acquisition of Ben de Graaff Tapijt, for €8 million (£6.3 million) in cash.

The target company is a retailer of floor coverings and curtains/ blinds based in the south of Holland.


The chief executive of Belgian-based tower crane rental company Arcomet increased his shareholding in the business in June.

Dirk Theyskens bought the 20 per cent stake held by venture capitalist GIMV for an undisclosed sum in a deal that included the ten per cent stakes held by private equity firms Sofinim and NPM Capital.

Maître Paul

Fortis Private Equity and Clearwood became the new owners of Tilburg-based frozen pastry-maker Maître Paul this year after buying the company from Swiss food and beverage giant Nestlé for an undisclosed sum.

Maître Paul is the largest industrial pastry producer in the Netherlands, making 50,000 cakes and pastries a day for sale in the Benelux, Germany, France and the UK.

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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