Uncertainty and business valuation: the impact on takeovers and family business transmissions.

1. Less reliable forecasts
   Inflation, geopolitical tensions, and fluctuating exchange rates make sales prices, margins, and certain costs such as container transport harder to predict. As a result, forecasts become less reliable, making investors much more cautious, and forcing management to adjust more rapidly.
2. Pressure on profit margins
   Commodity and energy prices are rising, and companies cannot always pass these on to their customers. Automatic wage indexation in Belgium further weighs on margins and cash flow, especially where labour costs represent a significant share of operating expenses. This reduces investment capacity and depresses business value.
3. Higher interest rates and WACC
   Rising interest rates increase investors’ expected returns. Under the DCF (Discounted Cash Flow) method, this leads to a higher WACC (Weighted Average Cost of Capital). This method determines the value of a business based on the actual value of its forecasted future free cash flows. This formula incorporates not only the risk-free rate as a baseline but also risk premiums linked to market, sector, or even company-specific factors. The higher the WACC, the lower the estimated business value.
4. Lower multiples (EV/EBITDA and P/E)
   Another frequently used method is based on multiples. De valuation is based on the actuel normalized results of the business (sales, profit, EBITDA). Then a multpile is applied, using multiples based on stock prices of comparable listed companies or multiples applied in recent relevant transactions.In stable markets, buyers are willing to pay higher multiples. In uncertain times, these multiples decrease. According to the latest M&A Monitor (Vlerick Business School, 2025), multiples in Belgium are historically low but have remained stable since 2023. This may offer some reassurance, but combined with lower EBITDA margins, the result is still a lower valuation.

For entrepreneurs and families considering a sale or transfer, these are key issues to keep in mind:

• Lower bids: buyers factor in higher risks.
• Distorted picture: recent years often do not reflect the company’s true potential, as current economic conditions weigh on results.
• More difficult negotiations: families increasingly face tensions and complex discussions between successors and family members not joining the business.

Today, uncertainty is one of the biggest destroyers of value. It affects not only valuation models but also the confidence of investors, buyers, and acquirers. It complicates an objective dialogue about a company’s past, present, and future.

A credible and reliable equity story is essential during a takeover or transmission, especially in times of uncertainty.

Proper preparation is therefore crucial:

• Use several valuation methods and analyse different scenarios.
• Ensure a clear financial dashboard and prepare a business plan over several years, and validate the assumptions used, with sufficient objectivity and testing.
• Tell a strong equity story: outline the future potential of your business, building on your unique expertise and past achievements.

A buyer will not pay for what your business achieved yesterday but for what it can deliver tomorrow. Your equity story must not only be credible but also inspiring and objectively substantiated. It requires a deep understanding of all factors that may affect the value of your company. That is why a thorough and timely preparation is essential.

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For more than 30 years, deminor NXT has been assisting entrepreneurs and families with the sale or transfer of their businesses. Would you like help telling your equity story? Please contact Bernard Thuysbaert.