„The market has been hit by the covid-19 pandemic. This caused lower valuations, resulting in consolidation opportunities for established multinationals in the DACH region.“
Global Facility Management Market
- We expect the global facility management market to develop stably at a CAGR of +4% until 2027. Positive factors for growth include a „back2business“ boost after the lockdowns of the Covid-19 pandemic, but also increased M&A activity
- Within the distribution of facility management services, developed economies show similar splits among the three categories where in-house FM and outsourced FM are more or less equal. Whereas, for developing economies we still see a stronger predominance in the in-house FM services
Sources: TGA (2021), Globesnewswire (2020), Lünendonk (2020), Statista (2022)
Austrian Facility Management Market
- The facility management market in Austria is highly competitive. The top 10 players have a market share of 17.4%, with ISS Facility Services clearly being defined among the market leaders
- With its CAGR of 4.1% to date, the Austrian market is setting the course for stable growth in the coming years. The increased trend towards consolidation is particularly noticeable here, as players such as P. Dussmann have been able to achieve strong sales growth through acquisitions in the past 48 months. At the same time, many German players have repeatedly struggled to establish themselves in Austria
Sources: Sazun Research (2021), Lünendonk (2020)
The covid-19 pandemic impacted the industry manifoldly. Because of the enticing new ways of working, setting a higher emphasis on hygiene and highlighting ESG, the competition among facility management companies has increased, however not resulting in a price war but much rather in providing a service of higher value.
Digitalization in the facility management sector has brought up new opportunities for firms to develop competitive advantages. Being via sensor technology, data analytics, cloud-based data gathering or remote monitoring, the digitalization of workplaces has brought many Proptech initiatives within Startups, but also large corporates.
Besides enticing digitalization, the new way of working has impacted facility managers by pushing towards a greater need of flexibility in their business models. Because of Hybrid schemes, less demand may be seen in traditional services, such as office cleaning and more emphasis may be set on the technical capabilities of the office spaces.
Sources: Disruptive Technologies (2021), Facility Management (2021), Deloitte (2021)
Valuation Trends and Developments
Looking at the LTM computation method, facility management companies have, initially, been sharply hit by the impact of the COVID-19 pandemic which caused an average drop in EV/SALES and EV/EBITDA multiples of -30% and -25%.
However, with smoothening developments, the market recovered well and is now seen at historical median multiples of 0.6x and 8.9x for EV/SALES and EV/EBITDA respectively. Nevertheless, we are not too optimistic in the midterm and assume a slight decrease in multiples
Source: Infront Analytics – Sazun Global Facility Management Peer Group (2022)
Selected Latest Deals (LTM)
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