Webinar: What is the impact of the SGEI scheme on the value of my childcare?
Many entrepreneurs who their want to sell childcare, are currently in a difficult position. The possible introduction of the SGEI scheme The period from 2029 brings uncertainty, while at the same time the market for acquisitions is changing. The question we hear increasingly often is: should I sell my childcare business now, or wait and see?
During a recent webinar we organized on this topic, childcare specialists Arno Dielesen and Iris Roozenburg from Match Plan discussed these developments and their impact on valuations and transactions in detail. In this blog, we summarize the key insights for you.
What does the SGEI scheme mean for childcare entrepreneurs?
The SGEI scheme means that childcare may be classified as a Service of General Economic Interest, effective January 1, 2029. This entails fundamental changes for the sector. Specifically, this has a number of important consequences:
Restrictions on profit and return
: The scope for generating a profit is limited. This means that future returns are less free and therefore become less attractive to investors. Ultimately, this can have a depressing effect on the valuation of your company.
Stricter accountability for activities
: Entrepreneurs will face more extensive administrative obligations. You must be able to clearly demonstrate which activities fall under the SGEI scheme and how funds are deployed. This requires more structure and transparency within the organization.
No overcompensation from public funds
: The government sets limits on the extent to which enterprises may be financially supported. This results in less scope to optimize returns through subsidies or reimbursements, which affects financial flexibility.
Greater influence of regulations on business operations
: The sector is more heavily driven by laws and regulations. This restricts entrepreneurial freedom and makes strategic choices less flexible. For buyers and investors, this means a higher risk profile.
For entrepreneurs, this means that the sector is shifting from a partly private market to a more regulated environment. This has direct consequences for how investors and buyers view childcare organizations.
What is the impact of SGEI on the value of your childcare?
In practice, the impact of SGEI on the value of your childcare can be reduced to three clear effects:
1. Effect on EBITDA (profitability)
Due to profit restrictions and stricter regulations, the margin comes under pressure. This means that the structural earning capacity of the company decreases.
2. Effect on investor interest
Uncertainty regarding future regulations and returns is causing private equity firms to become more cautious. Conversely, other parties, such as (foreign) strategists and foundations, are becoming more active.
3. Effect on the multiple (valuation)
The changed risk profile and growth expectations mean that buyers view the value of a childcare facility in a different way.
Is this the right time to sell your childcare business?
Whether you are considering a sale is a personal decision. This depends on whether or not you expect the DAEB to actually materialize. For many entrepreneurs, this is precisely the moment to explore options. business sale, because the market is in a transitional phase. Others prefer to simply continue doing business and expect that it will not go ahead.
The most important considerations are:
- How dependent is your value on future regulations?
- How attractive is your company to buyers in the current market?
- What are your personal goals as an entrepreneur?
Whatever your leanings, it is important that you are prepared for various scenarios. In practice, we see that well-prepared entrepreneurs still realize strong transactions, while less prepared organizations struggle to find buyers or have to settle for lower valuations.
How do you prepare for a potential sale?
Good preparation makes the difference between an average and a strong transaction, especially in a changing market. Important steps are:
Insight into your value
: Have an independent valuation carried out and map out how SGEI impacts your future results.
Calculate scenarios
: Analyze different scenarios: selling before 2029, after 2029, or not selling at all. This provides direction for your strategy.
Making your company ready for sale
: Ensure clear figures, contracts, and structure. business ready for sale reduces risks for buyers and increases value.
Keep following the market
: Developments are moving fast. Regularly sparring with an advisor helps to switch gears at the right moment.
Why is knowledge of the childcare sector essential right now during a sales or acquisition process?
In the current market, sector-specific knowledge is essential. Developments surrounding the DAEB scheme require not only financial insight but also a sound understanding of the dynamics within childcare and the way in which regulations impact valuations and transactions.
Whereas previously the focus was primarily on historical performance, future expectations and risks now play an increasingly important role. This calls for an advisor who not only understands the numbers but also knows what is happening in the sector and how this impacts the behavior of buyers and investors.
At Match Plan, we combine these perspectives. In addition to their experience in the mergers and acquisitions market, our advisors Arno Dielesen and Iris Roozenburg have also operated as entrepreneurs in the childcare sector for many years. As a result, they understand not only the financial side but also the practical realities, challenges, and strategic considerations you make as an entrepreneur.
In addition, since 2023, we have been a partner of KinderopvangTotaal, a leading platform within the sector. This enables us to stay closely involved with the latest developments and to be in direct contact with entrepreneurs and other stakeholders in childcare.
Why choose Match Plan?
Match Plan guides entrepreneurs from initial orientation to the final transfer. As independent advisors, we ensure a structured process that prioritizes your interests. What we do for you:
- We offer complete support from start to finish, from the initial strategic exploration to the formal transfer at the notary.
- With over 30 years of experience, we combine in-depth knowledge of business transfers with a personalized approach tailored to your situation.
- Our advisors provide strategic advice on negotiation strategies, valuations, and potential reinvestment.
- We work independently and transparently, always putting your goals and interests first in every step of the process.
- We ensure a worry-free process by coordinating the entire process, so you maintain an overview and can continue to focus on the value of your company.
Would you like to discover what a sale before or after 2029 means for your childcare facility? Feel free to contact us for a no-obligation consultation.
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