The sustainability sector is still quite young but is characterized by maturity because sustainability is a topic that is (mandatory) on the agenda of almost every entrepreneur. The future for companies in sustainability is therefore very bright and there is a lot of dynamism in this fragmented sector. This leads to a lot of activity in the merger and acquisition market in this particular segment.
Public attitudes towards sustainability are changing. Consumers are flocking to companies that promote themselves as cutting emissions, reducing plastic, or using recycled materials. They increasingly choose electric cars, solar panels, locally produced food, and other products that contribute to a better world.
Companies must also comply with sustainability goals imposed by governments. This can create momentum for take-overs in the sustainability sector, even against a background of rising raw materials prices and shortages of materials and staff.
A better ESG position can create additional value: conversely, a company without a robust ESG strategy may miss out on revenue opportunities and be less attractive to buyers and investors. Ratings providers have developed methodologies to evaluate ESG performance, and it may not be long before ESG due diligence determines whether a deal goes ahead, and both sides have to consider governance and risk management around climate, social and labour issues, product design, and sourcing materials.
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The sustainability market has reached maturity in the past couple of years, with demand sometimes outstripping supply and leading to supply chain collaborations and companies joining forces through business acquisitions. This is underlined by investors who seek a take-over in the sustainability sector in order to execute their buy-and-build strategy.
There are plenty of good reasons to consider a take-over in the sustainability sector, or to pursue a buy-and-build policy. The growing importance of sustainability to consumer and businesses should ensure your company is well-positioned in the market.
Our professional assistance can help you in the search for a potential purchaser, as you prepare an exit strategy or to generate retirement income.
Each year, more than a thousand entrepreneurs in this sector use the Marktlink Multiple to calculate their business value. We regularly guide the transaction process for sustainable businesses and have unrivalled market knowledge and a substantial portfolio of potential buyers and sellers.
Contact us now for more information.