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2019 PANORAMA OF BUSINESS TRANSFERS IN ILE-DE-FRANCE
In Ile-de-France, 103,000 companies with at least one employee are headed by a manager aged 55 or over, who will therefore be concerned by the transfer or sale of his or her company in the medium or long term. If no buyer is found, these companies could disappear. 684,000 employees work for them. During ten years, 68,4000 jobs are potentially threatened to disappear each year if these companies are not taken over. In addition, there are 273,000 companies without employees, also affected by the cessation of their manager’s activity within ten years. In order to enable these companies to continue their activities and preserve their jobs, numerous assistance and networking mechanisms have been created between the owners and potential buyers.
Nearly one out of three companies in the Paris region, including companies with no employees, is run by a manager aged 55 or over. Potentially, 376,000 companies with fewer than 50 employees are or will be concerned in the short or medium term by the problem of changing managers. 27.6% of these companies have one or more employees, with small businesses being the most numerous: 22.6% of them have 1 to 9 employees and 4.7% have 10 to 49 employees. Without a buyer, some 68,400 employees would be threatened by the disappearance of their company each year.
These estimates of the number of businesses to be transferred constitute a maximum. In fact, not all companies whose managers decide to cease operations will be affected by the transfer: some will disappear without looking for a buyer or buyers – this phenomenon is more widespread for companies without employees than for companies with employees; others will be taken over by a family member or an employee.
For medium and large companies (5,390 companies in Ile-de-France with 50 or more employees), the issue of transfer is different. Indeed, it seems unlikely that such businesses will disappear for lack of buyers.
Their CROCIS estimate of the CCI Paris Ile-de-France, see methodology transmissions are therefore generally resolved before or, more rarely, at the time of the manager’s cessation of activity, either by an internal succession or by the arrival of an external business manager, who often has experience as a manager. These companies, when they are in good economic health, are coveted by many takeover candidates.
The cessation of activity of the manager is not the only reason for the transfer of companies, but it is the situation that poses the most difficulties, as the transfer must be done quickly. Indeed, the transfer of a company is a complex and generally long process, which must be prepared well in advance. Thus, the manager must continue to manage and invest in his company. At the same time, he or she must learn the mechanisms of the takeover (letter of intent, due diligence, liability guarantee, etc.), set the appropriate price, organize the transfer from a legal and asset point of view, and find the buyer or buyers. The support of the manager and the buyer is therefore a determining factor in the transfer of a company.
Finally, selling at the right time is a key issue: the ideal time is when conditions are optimal for selling (market conditions, company situation, etc.), even if it means selling in advance. For this reason, the earlier the company is prepared to be put on the market, the higher the chances of making a satisfactory sale. As Branka Berthoumieux (head of the “takeover and transfer” Business Unit at the CCIR Paris Ile-de-France) points out, “It is estimated that it takes between 3 and 5 years to prepare a transfer properly, in order to present legible and reassuring elements to a buyer and thus enhance the value of the company’s assets.
It is commonly accepted that approximately 60% of business transfers take place on the “hidden market” and 40% on the “open market”. The “hidden market” is the one in which sellers and buyers meet without the information that the business is for sale being made public, i.e. family transfers, internal transfers (employee takeovers) and transfers in which the two parties have met through a network or a common contact. It is within this market that the most “beautiful” transactions take place. In the “open market”, information on the transferability of a company is public, most often via opportunity exchanges that bring together sellers and buyers.
Although there are more buyers than sellers overall, several factors explain the need for opportunity exchanges: most buyers are looking for the same company profile: a healthy service company with a high turnover and a niche activity. The reality of the offer is different: these are much more modest structures than those present on the “hidden market” and operating in sectors of activity other than those desired by the buyers. The global economic situation means that sellers are unable to sell their businesses at the desired value: many prefer to continue their activity while waiting for a better economic climate.
Trade is a separate issue:
– there are more businesses to sell than there are potential buyers,
– the motivation for buying a business is not necessarily the business itself, but more often the location of the store.
THE MAJORITY OF THE COMPANIES TO BE TRANSFERRED ARE SERVICE COMPANIES
Breakdown of companies in Ile-de-France with a manager aged 55 or over according to the company’s sector of activity
From a sectoral point of view, the distribution of companies potentially to be transferred in the next 10 years differs somewhat from that of all companies: service companies are more numerous (74.5%) among those to be transferred than for all companies (69.0%). On the other hand, other sectors of activity are under-represented: 15.8% for businesses in the retail sector compared to 16.3% for all businesses, 6.9% for businesses in the construction sector (compared to 10.9%), and finally, the proportion of industrial businesses to be transferred (3.9%) is equivalent to that of the overall fabric (3.8%).
Like the Paris Region economic fabric, in which the majority of companies have no employees (75.8%), the companies whose managers are 55 or older have no employees (72.6%) or few (between 1 and 9 employees for 22.6%). Micro-entrepreneurs are counted among the businesses without employees, as they are, by definition, non-transferable.
There are, however, disparities between sectors of activity: among industrial companies transferable in the short or medium term, 62.8% have no employees; this proportion is much higher for services (75.7%).
In terms of jobs, the challenge of business transfers is therefore proportionally more important for industry than for services. However, in terms of the number of jobs at risk, it is in the services sector that the issue is most important: 74.5% of companies whose managers are aged 55 or over are in the services sector.
Distribution of companies in Ile-de-France whose manager is 55 years old or more according to the number of employees in the company
| 0 employees | 1 to 9 employees |
10 to 49 employees |
Set | |
| Industry | 62,8 % | 26,0 % | 11,1 % | 100 % |
| Construction | 63,4 % | 31,1 % | 5,6 % | 100 % |
| Trade | 63,2 % | 31,1 % | 5,6 % | 100 % |
| Services | 75,7 % | 20,1 % | 4,2 % | 100 % |
| Total | 72,6 % | 22,6 % | 4,7 % | 100 % |
CROCIS estimate of the CCI Paris Ile-de-France, see methodology
There is a correlation between the size of the company and the age of the manager; thus, the higher the number of employees, the higher the proportion of managers aged 55 or over.
As there are also major sectoral disparities, significant differences appear when the variables “sector of activity” and “number of employees” are crossed: 47.5% of industrial companies in the Paris region with between 10 and 49 employees will be transferred in the short or medium term, whereas “only” 17.7% of construction companies with no employees will be transferred.
Share of companies with a manager aged 55 or over, by sector of activity
| 0 employees | 1 to 9 employees | 10 to 49 employees | Total | |
| Industry | 30,7 % | 37,0 % | 47,5 % | 33,5 % |
| Construction | 17,7 % | 25,4 % | 31,1 % | 20,1 % |
| Trade | 28,3 % | 38,5 % | 44,7 % | 31,6 % |
| Services | 33,6 % | 39,4 % | 47,9 % | 35,0 % |
| Total | 30,8 % | 36,7 % | 44,1 % | 32,5 % |
CROCIS estimate of the CCI Paris Ile-de-France, see methodology
68,400 JOBS THREATENED EACH YEAR IN THE ILE-DE-FRANCE REGION
Companies with fewer than 50 employees and headed by a manager aged 55 or older employ some 684,130 people; each year 68,410 jobs are therefore potentially at risk of disappearing if these companies are not taken over. The majority of these employees work in service companies – 445,700, or 65.1% of the jobs concerned -, 132,400 salaried jobs are in the retail sector, 55,200 in companies in the construction sector and finally 50,830 in industrial companies.
Estimated number of jobs affected among companies with less than 50 employees
| 1 to 9 employees | 10 to 49 semployees | Total less than 50 employees | |
| Industry | 14 630 | 36 200 | 50 830 |
| Construction | 26 500 | 28 700 | 55 200 |
| Trade | 59 000 | 73 400 | 132 400 |
| Services | 180 000 | 265 700 | 445 700 |
| Total | 280 130 | 404 000 | 684 130 |
CROCIS estimate of the CCI Paris Ile-de-France, see methodology
FAQ
What services does Actoria provide?
Actoria specializes in mergers and acquisitions advisory for small and mid-sized businesses. Our services include company sales, succession planning, buy-side and sell-side mandates, business valuation, financial diagnostics, investor sourcing, negotiation support and full transaction execution until closing.
Who does Actoria work with?
We support SME owners, family-business leaders, shareholders, entrepreneurs, private investors, and corporate groups seeking to acquire or divest businesses in Europe and North Africa.
In which countries does Actoria operate?
Actoria has local teams in Switzerland, France, Belgium, Luxembourg, Morocco and Tunisia, and manages cross-border deals across Europe, Africa and the Middle East through an international buyer network.
How many potential buyers are in Actoria’s network?
Our proprietary network includes more than 6,500 qualified industrial buyers, strategic acquirers and financial investors, allowing us to match sellers with high-quality counterparties.
Does Actoria support confidential business sales?
Yes. Confidentiality is fundamental to our process. All discussions, documentation and buyer approaches are handled discreetly to protect the interests of the seller and the business.
What industries does Actoria cover?
We advise companies across multiple sectors, including industrial production, manufacturing, services, IT and digital, healthcare, logistics and distribution, construction, and specialized B2B services.
What is the typical size of businesses Actoria represents?
We primarily advise SMEs with revenues generally ranging from CHF/EUR 2 million to 100 million, depending on jurisdiction and market.
How does Actoria determine the value of a business?
We perform detailed financial and strategic analysis using multiple valuation methods, including discounted cash flows, market multiples, asset-based methods, and sector benchmarking.
How long does a business sale process take?
A standard transaction typically takes 6 to 12 months depending on market conditions, buyer interest, company complexity and diligence requirements.
Why choose Actoria as an M&A advisor?
With over 20 years of experience, a senior advisory team, a structured methodology, and an extensive network of qualified buyers, Actoria delivers independent advice, tailored execution and strong transaction results for SME owners.
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Actoria has swiftly identified the inefficiencies in our company’s processes, proposed optimizations, and implemented them effectively. Furthermore, Actoria has provided outstanding support throughout all stages of our company’s transfer to a group within our industry. This includes preparing our company, identifying potential buyer partners, and negotiating up to the point of the partner’s capital entry. Actoria delivered expert negotiation skills and secured a valuable partner for us.
We were quite anxious to find a solution, as my health was deteriorating rapidly. Actoria’s consultant played a crucial role in the successful completion of my company’s sale. Their involvement was essential in executing this delicate project, as it impacted our daily operations. This project, which was close to my heart and increasingly necessary, was made possible thanks to the decisive momentum provided by Actoria.
First, Actoria conducted a thorough assessment of our company’s strengths and weaknesses, and then suggested incorporating these insights into our management approach to enhance our company’s value. Actoria led this project alongside my entire management team, enabling the involvement of all key personnel, and swiftly implementing a solution that allowed an investor to enter our capital. This was complemented by the inclusion of some of my company’s executives and a bank.
I couldn’t be happier with the result, but I am especially pleased with my decision to work with Actoria. The success of this mission was the direct result of Actoria’s hard work and sophisticated professionalism on my business. From our first meeting through the reasonable preparation process, all phases of the transfer, legal and financial operations were managed by the Actoria team. Their skills were even more evident when the complexities of this transaction were at its peak.
Hiring Actoria made the difference to achieve my original goal and move on to my next professional challenge. Selling a company like AMR in this market has not been an easy task. Actoria has demonstrated perseverance in identifying good buyers with knowledge of my industry in order to continue the development of my business, and has provided professional advice throughout the process.
The company’s sales process was a lengthy and challenging journey. The professional support from Actoria made this endeavor much more manageable. I would like to extend special thanks to the consultants from Switzerland and France for their highly effective collaboration. Your consultants proposed creative solutions during the negotiations, which effectively overcame significant obstacles in order to finalize the agreement. Their experience, knowledge, and professionalism played a crucial role in the success of this transaction.
