Sales and purchases of small businesses: recovery by 2024 - Business Journal

The number of transactions with SMEs is starting to rise in France. After a 35% decline in the first half of 2023, it increased by 20% in the second half. This is evidenced by the 8th annual review of SME purchase and sale transactions conducted by the accounting firm In Extenso, which analyzes deals involving companies valued between 1 and 50 million euros.

Market downturn in transactions

Year after year, since 2022, the market for buying and selling SMEs has been declining. This is due to rising interest rates, the energy crisis, and global geopolitical tensions. The decline was 8% in 2022. Despite a recovery in the second half of the year, the market decreased by 11% in 2023, with 964 SME sales.

Reasons for recovery

However, a significant recovery in the second half of the year suggests a return to market growth in 2024. According to In Extenso, the anticipation of declining interest rates and the "absorption of the impact from rising prices" (raw materials, energy, and wages) should lead to an increase in transactions with SMEs this year. Another important factor is the abundance of liquidity in investment funds and the ongoing consolidation in certain sectors, such as software development. The increase in business volume recorded at the beginning of this year supports this analysis.

Differences between regions and industries

However, recent data shows significant differences between regions and sectors.

Equipment growth

In terms of sectors, only one shows an increase in the number of transactions with SMEs in 2023, namely the equipment sector (+39%). This significant increase follows a decline in transactions noted in 2022: a shortage of raw materials and inflation made forecasts in this industry challenging.

Sectors in decline

The construction sector is suffering from a sharp decline in the new housing market. A number of deals are being postponed due to the unfavorable economic situation. The food industry and transportation have also been affected, with the number of transactions involving SMEs significantly decreasing (-23% each in 2023). Other sectors are more or less in line with the national average (-11%): trade (-7%), technology (-10%), energy (-11%), consumer goods (-16%), and healthcare (-17%).