The latest Makers Top 100 shows that manufacturing companies with private equity shareholders realize an average EBITDA margin of 14 percent, compared to 12.5 percent for family-owned companies. Together with David Kemps (ABN AMRO), Dirk Harm Eijssen – partner at Gwynt – delved into the figures and concludes that the difference is logical, but does not constitute a black-and-white story.
Private equity funds mainly choose profitable platform companies and accelerate growth through buy-and-build. This yields economies of scale and forces them to sail close to the wind on the basis of a concrete strategy. Family-owned companies invest with a view to future generations and show courage in markets where the business case is not yet crystal clear. In the high-tech chain around ASML, more than 80 percent of the suppliers are now (partly) PE-financed, while an estimated 40 percent of the entire Dutch manufacturing industry remains family-owned.
The financial analysis of the Makers top 100 shows that both forms of ownership can be successful side by side from two different visions. Private equity professionalizes and consolidates; family businesses guard entrepreneurship and long-term innovation. The future calls for a balanced mix of return and vision – a conclusion that fits perfectly with Gwynt’s conviction that sustainable growth occurs when structure and entrepreneurship are jointly developed within the (family) business.
Article in Link Magazine by Wouter denOttelander, with co-author DirkHarmEijssen (Gwynt).
You can read the full article here.
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