“One challenge I foresee is the difference in expectations between buyers and sellers regarding valuations", says Ida Kuijken, Partner at Fortino Capital. “This gap often emerges in initial discussions. While many transactions have occurred over the past year, which helps bridge these differences, they still pose a challenge for founders and potential investors. Advisors play a crucial role in reconciling these expectations.”

Tim Boer, Partner at AXECO, agrees, noting that differing perspectives on company value can lead to difficult negotiations. “Economic uncertainty exacerbates this issue”, he explains. “Sellers may be overly optimistic about growth opportunities, while buyers may be more cautious due to market risks, growth challenges and current trading.”

Sjoerd Peijster, Investment Manager at Strukton Group, adds another layer to the discussion, particularly concerning family businesses: "Valuation differences remain a challenge, especially in family businesses where emotional value plays a role. Increasing compliance requirements also pose a growing challenge, especially as many companies are not yet fully prepared."

Richard Reis, Partner at Argos Wityu, identifies fluctuating market conditions as the foremost challenge. “Economic instability affects everything else”, he notes. “It complicates financing, amplifies valuation discrepancies, and increases competition for quality deals. Geopolitical tensions and shifting trade policies only add to the uncertainty.”

Tom Snijckers, Partner at Oaklins Netherlands, echoes this sentiment, emphasizing the impact of geopolitical tensions on market dynamics. “While valuation gaps and financing issues are significant, they often stem from the broader economic instability”, he states.

Hans Swinnen, Partner at 3d-investors, shares his perspective, emphasizing the competitive landscape: “In private equity, the intense competition for attractive targets will remain a major challenge. When good companies are on the market, everyone is willing to pay a premium.” He also points out the disparity between the U.S. and European markets, where some companies may face a less favorable outlook.

Karel Pinxten, Partner at Deloitte, adds that the length of M&A processes exacerbates these challenges. “A typical M&A deal takes around 9 months, and changing market conditions during this time can significantly impact outcomes”, he explains.

The challenge of securing financing is a pressing concern for many dealmakers. Marco Gulpers, Head of Corporate Finance M&A Netherlands at ING, highlights the complexity surrounding this issue. “Financing is a big challenge, along with the complexity and thoroughness of due diligence", he states. “Valuation expectations are another challenge, setting expectations right. The fluctuating market conditions also add to the difficulty, especially when companies' first-quarter and full-year budgets are already under pressure. Current trading performance is a key factor.”

Sjoerd Peijster emphasizes the growing reluctance of banks to provide acquisition financing, noting that high inflation and stagnant interest rates could hinder M&A activity. “The current economic climate is impacting banks' willingness to finance acquisitions, which poses a significant challenge for dealmakers”, he explains.