Ascendis: We are not an easy to sell business

The market value of Ascendis, one of the leading players on the Romanian training and human resources consultancy market, currently stands at around 45 million euros, says Costea Dumitrescu, company shareholder and partner.
“If I consider how this sort of business (which provides services with a high added value) is evaluated, I would say the company’s value could reach around 4-5 million euros,” says Dumitrescu.
Training companies do not appeal to investors and are difficult to sell, predominantly due to a heavily fragmented market. “Our business is not easy to sell. The consulting and training we provide are not very attractive for investors. This is a quintessentially fragmented business throughout the world, which is not being consolidated, and this is exactly what investment funds are interested in: a business they can buy, expand, and then sell to players looking to consolidate them,” explains Dumitrescu (50), who recounts that, in the first two years after he left Xerox with Adrian Stanciu to build his own training firm, turnover failed to match even his salary at Xerox.
On the local training market, there were no sizeable deals, with most training firms being start-ups (Ascendis) or branches of international companies (TMI). Another reason why it is so difficult to sell a training company is the fact that the assets of such a business are not material, because they are human. “The inevitable question that potential buyers ask is ‘what am I buying? ‘. The answer is: an association of valuable people, with no guarantee you will be able to keep them in the company in the long run. These businesses are not easy to sell. We may like to sell, but I don’t think it will ever happen,” says Dumitrescu.
Moreover, he says a few years ago he went to Austria to test the waters with a view to selling the company. “We talked to the No. 3 company on the Austrian training market, and realised we were larger,” says the Ascendis partner. The company ended last year with business worth 2.3 million euros and profit worth over 500,000 euros.