2024: Dutch M&A market for digital agencies report
IN COOPERATION WITH INDUSTRY MAGAZINE EMERCE
With our dedicated sector team focused on this space, CFI Benelux is at the frontline in shaping the consolidating digital agencies market, demonstrated by 15 completed transactions in the past 4 years. In this capacity, but also beyond our deals, we maintain a continuous dialogue with international investors, active platforms, agencies, entrepreneurs, and other stakeholders, which provides us with a comprehensive understanding and view on the market.
In partnership with Emerce, an influential media platform renowned for e.g. the Emerce100, we analysed the 250+ deals in the Dutch market from 1Q20 until 1Q24 in the “2024: M&A market for Dutch digital agencies” report. In this report, we provide our commentary and view on historic developments and future prospects in this dynamic (M&A) market, which is characterised by:
- Numerous platforms backed by investors
- High deal flow
- Distinct pathways, each with unique DNA, culture, structure, and USPs
- A pan-European perspective with many international platforms
The Benelux market landscape
With a frontrunning position in global digitalisation, the Benelux region offers a dynamic landscape of digital marketing agencies where innovation and creativity are paramount, with numerous niche agencies with deep expertise. A strong and ongoing wave of consolidation is forming large digital marketing platforms with diverse strategic approaches, advantages, synergies, and focus areas. For more detailed insights, please refer to our previous article. In this article, we cover the background and current market landscape, but also challenges ahead such as include privacy issues, sustainable branding and marketing, and the impact of disruptive technologies.
Deal making: experiences and expectations
We understand the critical factors for entrepreneurs considering deals. The report covers experiences from agency entrepreneurs who have successfully sold their businesses. Through interviews they elaborate on the key challenges and recommendations in their deal, to guide entrepreneurs in such a process. Furthermore, we provide references on valuation and the structure of transactions, typical in the digital agencies market.
Year in review: 2023
Despite operational challenging and headwinds, the 2023 dealflow remained on sustained levels, compared to 2021 and 2022. The strong M&A activity efforts remain highly effective for buy-and-build routes in the fragmented and segmented digital agency market. Several new partnerships have been established between larger agencies and investors to pursue accelerated growth strategies. Furthermore, the deal focus shifted from cross-border deals to more domestic transactions, with less involvement of investors. The top consolidators in 2023 largely differ from the most acquisitive platforms in previous years.
Looking ahead: 2024 and beyond
Over the years, numerous investors have partnered with platforms, with whom they have executed buy-and-build strategies. As these partnerships typically span a limited number of years, we expect larger transactions in the future with investors exploring exit opportunities in a pan-European setting. With the formation of new platforms and resumed acquisitive efforts of existing platforms, we foresee an uptick in transactions in 2H24 and beyond.
To view the full report, please visit the Emerce website (note: an Emerce Team Subscription is required).
