On Wednesday, May 14, a large number of Belgian M&A professionals and investors gathered at Vlerick Business School for the annual presentation of the Belgian M&A Monitor. Led by Professor Mathieu Luypaert of the Centre for Mergers, Acquisitions and Buyouts, the report captures the collective insight of 156 Belgian M&A professionals, shedding light on recent trends, market sentiment, and deal-making dynamics across the country.
Standing before a packed lecture hall, Professor Luypaert unveiled the results, structured into three core themes: evaluation of Belgian M&A activity, valuation trends, and deal features and processes.
Alongside his presentation, a panel of industry experts – Jan Camerlynck (Sofindev), Steven Buyse (CVC Capital Partners), and moderator Professor Sophie Manigart (Vlerick) – provided their real-world reflections on the data.
A fragmented picture: Stability masking uneven movement
“The first question that we always ask in our survey is: how did the number of transactions evolve in Belgium in 2024?” Luypaert began. “We saw that 27 percent of the respondents argued or saw that the market was quite stable. Interestingly, at both sides, both at the increasing and the decreasing sides, we see equal fractions of respondents. To be more specific, 37 percent said the market decreased, 36 percent said that the market increased.”
This divergence in opinion, Luypaert explained, points not just to differing perspectives, but to structural fragmentation within the M&A market. “In an aggregate way, the market indeed was stable. But the fact that there is so much variation in the answers also means that some segments of the markets probably outperformed other segments.”
International benchmarks confirmed the Belgian picture. “We’re not yet in a new wave of M&A activity”, Luypaert cautioned. “We're really at the bottom if you put it in a historical perspective.”
“We’re not yet in a new wave of M&A activity”
Size matters: Bigger deals face more headwinds
Delving deeper into the variation, Luypaert highlighted key differences across deal sizes. The survey segmented deal activity into four brackets. The result? A clear pattern: larger deals were hit hardest.
“What you see here very clearly is that the responses were most negative for the big transactions”, Luypaert noted. “It’s especially in the big transactions where you saw a more negative evolution in 2024. For the small transactions, then three out of four respondents actually noticed an increase or a stable market.”
Buyer type also played a role. “We especially see a difference regarding those that noticed a strong decrease in M&A activity. Because if you look at those pointing towards a significant decrease, you see actually that it's around 24 percent for the financial buyers and only 15 percent for the strategic buyers”, he said, highlighting that private equity players appeared more affected than corporates.
This pessimism was even more pronounced in the private equity exit market, where 45 percent of respondents reported a decline, and just a handful observed growth.
Forecast 2025: Rising optimism amid geopolitical jitters
Despite a turbulent backdrop – including trade tensions, volatile stock markets, and political uncertainty – the outlook for 2025 is strikingly positive. According to the Monitor, 63 percent of respondents expect a rise in market activity, and half of those forecast an increase of over 10 percent.
Luypaert explained, “It isn't an easy task, because you still have geopolitical tensions… Trump launched a Liberation Day, tariffs have been introduced.” Locally, Belgium’s new government and pending capital gains tax create additional uncertainty. “Still today there is a lot of uncertainty, especially also when it comes to M&A, because we do not yet know how that capital gains tax will eventually be implemented”, Luypaert said.
Yet, despite these headwinds, confidence remains high. According to respondents, the top drivers for increased deal-making in 2025 will be business confidence, availability of bank financing, and macroeconomic conditions – whereas political uncertainty and regulation were seen as less influential. “So if I make the link to the capital gains taxes, according to our respondents at least, they don't expect a strong impact on that”, Luypaert concluded.
“Still today there is a lot of uncertainty, especially also when it comes to M&A, because we do not yet know how that capital gains tax will eventually be implemented.”
Panel discussion: Cautious optimism, diverging realities
The panelists brought a valuable on-the-ground perspective to the figures. Sophie Manigart posed the key question: how are experts in different deal brackets experiencing the market?
Jan Camerlynck, who operates in the 20–100 euros million range, acknowledged the mixed signals. “It's overall been stable, but the beginning of the year was really calm. We've seen an uptick after the summer in the number of transactions”, he said. “We launched two exits just after the summer… that’s quite significant. So we saw really increased confidence in the market in the second half.”
However, he offered a different take on one of the Monitor’s conclusions. “I think the introduction – or at least the ever-appearing ghost – of a capital gains tax has been really driving some of the transactions in the Belgian market.”
Steven Buyse, bringing a broader European lens, identified the inflection point: “I think that the music stopped middle June 2020 when the interest rates went up… then the debt markets collapsed.” Since then, he said, deal-making became more selective. “You had a bifurcation of companies… top tier with pricing power, and the others that started to suffer.”
Buyse noted that his firm saw a strong year, especially in exits. But this success was concentrated in high-quality sectors like software, healthcare, and insurance – industries where liquidity and leverage are still available. For 2025, Buyse anticipates a continued rebound, but not across the board. “The smaller segment will continue to have its volumes, but in the chemical industry their activity will be much lower because the impact of tariffs is huge”, he warned. An even bigger issue for Buyse is energy prices in Europe. “European companies are not competitive anymore because of this. For me this is a much bigger issue than Trump.”
“European companies are not competitive anymore because of energy prices. For me this is a much bigger issue than Trump.”
Financing dynamics: The rise of private credit
Financing remains accessible – but the landscape is changing fast. “For the bigger transactions, financing is really crucial”, said Buyse. “In fact, the traditional banks at this moment are more retreating… in the small to mid-sized market, the banks retreated where we, with our private credit funds, had 10 percent, we now moved up to 50–60 percent in Europe of market share.”
Trends in valuation: multiples, gaps, and regional disparities
Following his overview of market activity, Professor Mathieu Luypaert shifted focus to a second major component of the Belgian M&A Monitor: valuation trends. In his words, “Based upon deals in 2024, we see that overall, the average multiple is 6.5, which is a slight uptick from the year before. There, the average was 6.4.”
While this increase is modest, Luypaert noted it masks substantial variation across deal sizes. Indeed, deal size continues to be the most decisive factor in determining valuation. “If you look at the smaller size segment, the average multiple is 5. If you go and look at transactions above 100 million, you see that the average is 10.5”, Luypaert explained. The data shows a clear positive correlation between deal size and EBITDA multiples, a pattern that has become entrenched over time.
Putting this into a historical context, Luypaert revealed that small deals – those below 5 million euros – have remained relatively static in terms of valuation. “For the largest segment, you see a jump from 7.8 to 8.4, which is definitely significant”, he pointed out. This is especially remarkable given that the overall number of transactions fell in 2024 – suggesting that a concentration of high-quality targets helped drive up average multiples.
Sector-specific data reinforced this narrative. Technology continues to command the highest multiples, averaging 9.1, followed by healthcare and pharmaceuticals. In contrast, more traditional, asset-heavy sectors like construction, logistics, and retail still trade at the lower end, with multiples hovering near 5.
The persistent valuation gap
Another focal point in this year’s Monitor was the valuation gap – the difference between the price sellers hope to achieve and the initial offers made by buyers. “We hear in the market that there is quite some tension because sellers have different price expectations than what the buyers are willing to pay”, Luypaert said. This year’s survey sought to quantify this mismatch for the first time.
The findings reveal that in one-third of transactions, the buyer's offer is less than 10 percent below the seller's expectations, suggesting reasonable alignment in those cases. However, in 28 percent of deals, the initial bid is more than 20 percent lower than the seller’s price, pointing to significant negotiation hurdles. Interestingly, only 10 percent of deals saw offers that exceeded seller expectations by more than 10 percent, underlining the buyer's market dynamics currently in play.
Regional discrepancies: Flanders vs. Wallonia
Geography also plays a notable role in valuation levels. “If you just compare Flanders to Wallonia, you see a difference of 1 EBITDA”, Luypaert remarked. This is not a minor discrepancy and prompted further investigation by deal size. “If you look at the big transactions, then there is no difference. But if you look at the smaller transactions, then you start seeing those differences.”
The panel provided rich context for these regional disparities. Jan Camerlynck, Managing Partner at Sofindev, shared a candid assessment: “From my experience in Sofindev, it's since 2008 that we made an investment in Wallonia, so that says something.” He attributed this to a less active private equity ecosystem in the region, a result of both market size and historical reliance on government-backed investment funds, which may have discouraged private investors. “It's more natural for a lot of private equity firms to go to the Dutch market than actually to the French-speaking part of Belgium”, he added.
“It's more natural for a lot of private equity firms to go to the Dutch market than actually to the French-speaking part of Belgium.”
Steven Buyse, Managing Partner at CVC Capital Partners, offered a more nuanced view. “I think that Wallonia doesn't really exist”, he began provocatively, before clarifying: “You have some areas that are really super entrepreneurial, like the area around or above Liège.” Citing the example of GAMING1 – a digital company in the region – Buyse emphasized the untapped potential in Wallonia. “There’s a new wave of businesses coming. These are European-minded entrepreneurs who want to grow internationally.”
However, both panelists agreed on a core issue: liquidity and market maturity. “In terms of mentality and willingness to open their capital to private equity, there’s still a way to go”, Buyse observed. Camerlynck echoed that sentiment, suggesting that lower competition and limited investor presence may explain both the lower valuation multiples and the slower transaction pace in the south of the country.
Deal features and processes
In the final part of the presentation, Mathieu Luypaert turned to the features and processes of M&A transactions. “We’ve introduced a new set of results capturing deal characteristics and process characteristics”, he explained. One of the first aspects examined was leverage. “So we look at net financial debt on EBITDA and we see that the average is close to 3”, Luypaert said. “That has always been close to 3. We see some peaks in our analysis in 2018 and in 2020, but all the other years it’s really close to 3. Last year: 2.9.”
He then addressed deferred payments, including vendor loans and earnouts. “We saw a quite interesting evolution here, and a different evolution for vendor loans compared to earnouts. Vendor loans have been increasingly used – in 2024 they increased from 39 percent to 43 percent. So that’s almost half of the transactions in Belgium.”
In contrast, earnouts became less common. “We see it dropping twice in a row. It used to be 36 percent two years ago, and now it’s only 31 percent.” Luypaert suggested that this may reflect the higher quality of assets on the market in the past year: “Maybe then there is less need for an earnout construction.”
Another indicator of change in deal dynamics was deal length. “How long does a deal process take – from first contact to completion?” Luypaert asked. The percentage of respondents reporting deal durations longer than six months had risen sharply in recent years: “In 2021, 53 percent of the respondents said it took on average longer than six months. That percentage increased to 60 percent in 2022, and in 2023 it reached a top of 72 percent.” However, the most recent data suggest a reversal of this trend: “Last year we see it going back towards 2022 levels – 62 percent of the respondents highlighting longer periods than half a year.”
The use of warranty and indemnity (W&I) insurance also showed clear evolution. “We did that once in 2020 and we now wanted to see how it evolved over four years”, Luypaert said. “We focus on the segment above 20 million euros and you see that overall it increases from 27 percent to 32 percent.” Most of the growth occurred in the mid-sized deal segment.
Finally, Luypaert addressed ESG due diligence, which has continued to grow in importance. “We used to see that it was mainly driven by the financial buyers, private equity companies that set ESG high on the agenda”, he said. “But we see that strategic inquirers are now also increasing. For both strategic and financial buyers, in about one out of four transactions such a formal ESG due diligence is being executed. So ESG is still on the rise despite all of the international counter movements that we see.”
"ESG is still on the rise despite all of the international counter movements that we see.”
The panel members reflected on these findings, starting with W&I insurance. Jan Camerlynck noted that from a buyer’s perspective, he’s less enthusiastic about it: “If it’s all insured and you don’t have to think about it, that’s a bit black and white. The sellers still need to read what they’re providing in terms of warranties.” However, he added that, “from a seller’s perspective, I’m pro, of course… we are in a closed-end fund structure, so we have to be able to provide liquidity to our investors and not have a tale of open potential liability. For us it’s almost standard to favor it.”
The role of artificial intelligence and other reflections
As the panel moved toward its conclusion, it turned its attention to one of the most transformative forces currently shaping dealmaking: artificial intelligence.
“AI, for us, it's a big topic”, said Steven Buyse. “We have a team of 10 people globally working on it. We have an AI director for all the people globally that have access to an internal data lake with ChatGTP. It's really powerful. It's amazing to see what you get out of all the data that we have.” For Buyse and his team, AI’s greatest value lies in its ability to accelerate processes without replacing critical human judgment. “It helps in analyzing”, he said. “In software coding, we on average win 50 percent or faster. You can reduce headcount with one-third or you can use them in other fields. You still need to think, and you're still dealing with people – management teams, owners, the founders. But it's impacting your own way of working, the whole process, and that of your portfolio companies.”
Jan Camerlynck echoed the view that AI's impact is significant and growing. “The impact is substantial”, he said. “It’s two questions, actually: how is AI interfering in the process of M&A and dealmaking, and what impact can AI have on the business models we’re investing in?” Camerlynck noted that AI is already being deployed to identify and evaluate potential transactions. “In the due diligence phase, it’s been used by our advisors. But I think indeed the biggest impact for us is when we screen targets. It’s doing AI due diligence – asking ourselves the question: what impact can AI have on this type of business?”
He stressed that AI is now a standard consideration in any M&A due diligence. “We see now already in some of the tech-enabled services, like marketing, that these industries will be disrupted in a huge way. So it’s definitely something to be very on top of at the board level.”
Evolving holding periods in private equity
Before concluding, the panel took one final question from the audience – how the holding periods in private equity have changed over time. According to Steven Buyse, the trend is clear: holding periods are getting longer.
“Compared to, let’s say, 20 years ago, the holding period is getting longer. In the past, it was three, four, five years. Now we’re getting into a longer period: five, six, seven years”, he explained. The reason, he said, lies in the rising difficulty of creating value in a high-price environment. “You need to work longer and harder to create value. 80 percent of the funding comes from pension funds, and they have a long-term view. If you bring back money too quickly for them, it’s also, quote-unquote, an issue.”
Conclusion
As the session drew to a close, Mathieu Luypaert offered a summary of the key takeaways from the day’s discussion. Before closing the session, Luypaert expressed gratitude to the event’s sponsors – Bank Van Breda, Moore, and Van Olmen & Wylyn – as well as to Wallonie Entreprendre for their collaboration.
As the online portion concluded, he offered a warm farewell to remote attendees. “Thanks for having attended this webinar. Have a nice evening and hope to see you soon at one event or another. And the big advantage of coming over to campus is that I can invite you for a drink and also something to eat. If everything went well, that should be right just outside of the auditorium. So thank you very much.”
