M&A Sentiment 2010

1. Which current developments characterize the German M&A market?

The M&A market is clearly gaining ground, especially in the segment up to EUR 100m. We can already see it in the increasing number of transactions concluded, but above all in the ongoing processes: There is a greater willingness to look at deals, more serious demand, stronger competition and improved valuations. Strategic investors continue to dominate: liquid medium-sized companies and large corporations, but also private equity houses, are clearly back in the market - and those are also looking at growth cases, not just restructuring cases. But the environment remains challenging. Above all, the financing side of the transaction must be addressed comprehensively, both the purchase price financing of the purchasers and the existing financing of the companies to be acquired. The risk awareness of all parties involved is still high - but that is also healthy!

2. Which trends do you expect in the next twelve months in the German middle class?

With the recovery of their sales markets, many companies are once again focusing on growth, also through acquisitions. And the opportunities to acquire investments in "healthy" companies will increase significantly in the coming months: Many owners have hold out with a sale, until attainable evaluations improve. This applies to medium-sized companies who want to settle their succession. Holdings that want to streamline their portfolios and Private Equity-Houses whose holding periods have in some cases been significantly exceeded. They are all in the starting blocks. This means that "healthy" companies are increasingly coming onto the market because the owners realize that they are not only dealing with "bargain hunters" on the bidder side, but also with interested parties who are prepared to pay reasonable prices.

3. What are your objectives in this regard for the next twelve months?

We will help our medium-sized clients to take advantage of the opportunities that present themselves on the M&A market - in the purchase and sale of shareholdings as well as in the structuring of succession arrangements. Our activities will continue to focus on advising on strategic financing issues - in the M&A context, but also beyond that: there is still an enormous need among mid-sized companies to comprehensively restructure or at least supplement the traditional financial relationships - usually with their principal bank. Many medium-sized companies - including and especially healthy companies - were angry to shocked when their house banks tightened their requirements overnight during the financial crisis. This has left its mark. Many of our clients are therefore going new ways in financing, and we support them in doing so.

The article was first published in the unternehmeredition in 2010.

Header Pic via Fotolia © Michail Petrov