Barbarians at the gate (February 2007)

Quarter of listed companies in the Netherlands is attractive to private equity investors. Research of Berenschot shows that a quarter of the listed companies in the Netherlands is attractive for takeover by private equity investors. Inmost cases because of a turnaround or split-up scenario, in other cases because of hidden growth potential.

The Berenschot study “Barbarians at the gate” aims to highlight the strategic issues for all stakeholders that come with the rising interest of private equity. Companies targeted by private equities are undervalued, have large unutilised growth potential, substantial cash, an incoherent portfolio of operations or inadequate profitability. All of which are factors that can be prevented by timely investment in strategy formulation and execution.

The growing activity of private equities is clearly demonstrated by the ever growing list of  companies that are taken over recently. Berenschot has developed a model to provide an understanding of the criteria that investors can apply to optimize returns. Management, shareholders and supervisory boards can use it to respond pro-actively to the question whether ‘barbarians’ will be knocking at their gates. But also to establish the best ways of knocking at the gates of ‘barbarians’ to obtain financing themselves.

The title Barbarians at the gate refers to the book of the same title by Bryan Burrough & John Helyat (1990). It certainly does not mean that we want to paint investors in a corner as barbarians. Instead we are zooming in on the way in which our ‘calm’ economic climate is being disturbed more frequently and differently than in the past.

Herewith we are pleased to provide you with a summary of the research for general publication.

For more information contact Hendrik Jan Kaal  or Luddo Oh at Berenschot through +31 (0)30 29169691.