Mid-market buyout segment: More transactions than last year

“Financing remains critical factor”

Frankfurt am Main, 26 January 2012. More mid-market management buyouts than in the previous year, no slowdown in M&A activity in the second half of the year after the slide in stock market prices – these are the developments reflected in the data released by Deutsche Beteiligungs AG (DBAG) today. A total of 31 transactions with a value of 3.5 billion euros were registered in 2011, five more than the year before (value: 2.4 billion euros). The statistics relate exclusively to majority takeovers by financial investors with co-investments by the target companies’ managements and which have a transaction value of 50 to 250 million euros for the debt-free company. The data is based on publicly accessible sources and own estimates by DBAG in collaboration with FINANCE magazine.

MBOs in Germany mid-market segment
Source: 1996 to 2010 “European Management Buy-outs Report – 1st half 2011 Review”, Centre for
Management Buy-out Research (Nottingham University Business School); 2011: Deutsche Beteiligungs AG

2011 saw only a few transactions in the upper segment of the market, since transactions of that size were evidently not easily financeable. The mid-segment, however, was left largely unaffected by the uncertainty prevailing in the markets. Twenty-three financial investors were involved in the 31 transactions that took place in 2011. On the buyer side, five investors transacted two deals each, and Deutsche Beteiligungs AG structured three management buyouts alongside its co-investment funds.

VendorFinancial investor
AnvisArquesHIG Europe
Paper+DesignNord HoldingHannover Finanz
RHM KlinikenRolf-Henning MayerWaterland
GealanAxa Private EquityHalder
Duales System DeutschlandKKRSolidus Partners, HIG Europe
d&b AudiotechnikAfinumOdewald & Compagnie
RomacoRobbins & MyersDeutsche Beteiligungs AG
Walter ServicesOdewald, Capiton, GildeHIG Europe, Anchorage
Case TechAdcuramEquita
EuropartFamilie PederzaniTriton
LynxGründerG Square
Haltermann ProductsDow ChemicalHIG Europe
Lapp InsulatorsAndlinger & CoQuadriga
LosbergerGründerHIG Europe
Mustang Heiner SefranekA-Capital
PharmazellAuctus, Lead EquitiesErgon
CordenkaCVC, Akzo NobelChequers
Kobusch-SengewaldPregisSun Capital
KeymileHannover FinanzRiverside, Halder
FerrostaalMANMPC Industries
Blohm + VossThyssen KruppStar Capital
SpherosBaird Capital Partners, CapcellenceDeutsche Beteiligungs AG
OberbergklinikenGründerfamilie GottschaldtOdewald & Compagnie
BrötjeClass KGaADeutsche Beteiligungs AG

Private equity firms were also involved in every second transaction on the vendor side. In addition to eleven secondary buyouts, there were two tertiary and two quaternary acquisitions by financial investors. Six previously family-owned companies changed hands by way of management buyouts.

The range of sectors to which the sponsored companies belong was particularly broad in 2011. Five buyouts involved companies operating in the chemical industry, four in mechanical engineering (including two by DBAG), as well as four each in the health-care and consumer goods sectors. Financial investors also acquired automotive suppliers, logistics providers and electronics companies, with three transactions taking place in each industry. In previous years, the proportion of transactions in the sectors of mechanical engineering, automotive suppliers and industrial service providers – sectors in which Deutsche Beteiligungs AG prefers to invest – was significantly higher.

“Market activity will depend on the extent to which acquisition finance becomes available,” said Wilken von Hodenberg, Spokesman of the DBAG Board of Management, presenting the latest market data. “There are many good companies seeking new owners, but in recent months it has grown more difficult to persuade banks to provide funding,” he said.