University of Twente Student Theses
Valuation and Transaction Price : Factors influencing the difference between valuation and transaction price of acquisitions in the Dutch SME market
Bekhuis, T.L. (2023) Valuation and Transaction Price : Factors influencing the difference between valuation and transaction price of acquisitions in the Dutch SME market.
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| Abstract: | This research examines the factors that influence the difference between company valuation and transaction price of acquisitions in the Dutch SME market. To gather insights, I interviewed fifteen merger and acquisition advisors who advise on acquisitions in the Dutch SME market. I presented the interviewees with a list of factors that previous research indicated affect the difference between valuation and transaction price of acquisitions. I asked them to assess the relevance of these factors in the Dutch SME context. Furthermore, the interviewees indicated whether each factor could result in the acquiring company paying a premium, a discount, both a premium or discount or if the factor was deemed not applicable within the market context. The research found that factors such as the presence of competing bidders, valuation assumptions, operational synergies, and factors related to the bargaining strengths of the seller and acquirer significantly influence the difference between valuation and transaction price of acquisitions in the Dutch SME market. The study also revealed that factors like competing bidders, bargaining strengths, and operational synergies are associated with a higher likelihood of the acquiring company paying a premium. In contrast, factors like conflict between shareholders and the desire to retire may lead to a discount in the acquisition price. Factors such as valuation method, valuation assumptions, and availability for financing showed mixed indications, suggesting that their impact on the difference between valuation and transaction price of acquisitions in the Dutch SME market can vary depending on specific circumstances. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/95482 |
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