22.01.2015

Mid-market buyouts in Germany in 2014: More transactions and higher value

  • Traditional industries much sought-after targets
  • Share of primary transactions stable on a high level
  • DBAG most active investor again
  • Financial investors’ capital strength and credit supply driving the market

Frankfurt am Main, 22 January 2015. Germany’s mid-market segment for management buyouts (MBOs) recorded an uptrend in 2014. The sector registered significantly more transactions and a higher overall transaction value compared with the preceding year. Traditional industries, in which numerous German companies hold leading positions worldwide, remained much sought-after targets for financial investors: in 2014, chemical companies, automotive suppliers, mechanical and plant engineering companies, as well as industrial services providers accounted for about a third of all MBOs.

MBOs in Germany’s mid-market segment

This is documented by the data issued today by Deutsche Beteiligungs AG (DBAG). The statistics relate exclusively to majority takeovers by financial investors, in which the target company’s management co-invests 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 as well as on estimates and own research by DBAG in collaboration with FINANCE magazine.

The number of transactions climbed from 23 to 31; the value of completed deals by financial investors in the German mid-market totalled 3.2 billion euros, surpassing that of the preceding year by more than one billion euros. The German MBO market is still characterised by a high proportion (19 out of 31) of primaries – buyouts in which a financial investor invests in a company for the first time; included therein are four transactions in which the MBO also resolved the succession issue in family-run businesses. The high proportion of primary transactions reflects the broad mid-market spectrum in Germany, indicating that private equity is an attractive form of financing for a significant number of companies.

Mid-market MBOs in 2014

Target Vendor Financial investor
Ada Cosmetics Carlyle Ardian
Amoena Granville, Baird Capital Halder
Ask Chemicals Clariant, Ashland Rhone Capital
BU Drive Company founder DPE Deutsche Private Equity
Camano Former partner Afinum
Caseking Afinum Equistone
Comcave College Maximilian A. Jaber Gilde
dtms Netrada Holding Paragon
Duran Adcuram One Equity Partners
Engelmann Sensor Brendecke family Capiton, Nord Holding
Gienanth Iron Foundry Gienanth Holding DBAG
Huhtamaki Films Huhtamaki DBAG
Hussel Douglas Emeram
J&S Automotive Finatem Brockhaus
J.H. Ziegler Unger Group, Staufen Invest DPE Deutsche Private Equity
Jet Group H2 Equity Egeria
Koller Gruppe Founding family Hannover Finanz
Leitner Blankenburg family ECM
Meridian Spa Private investors Afinum
Munich Building Technologies Founding family Equistone
Pfaudler National OilwellValco DBAG
PIA Performance Interactive Diverse former partners Equistone
Prefere Resins Dynea Chemicals Capiton
Sausalitos EQT Expansion Ergon
Schleich HgCapital Ardian
Stora Enso Uetersen Stora Enso Perusa
Time Partner Creditors/financial institutes Auctus
Transnorm Equita IK Investment Partners
Unser Heimatbäcker Steadfast DBAG
Vion Food Convenience Retails Vion Food Paragon
Windstar Medical Former owner Equita

 

“In 2014, we not only encountered strategic investors in the competitive field, but for the first time, driven by low interest rates, foundations and family offices to a notable extent as well,” said Torsten Grede, Spokesman of DBAG’s Board of Management, commenting on market activity this past year. “We prevailed in that competitive field given our very experienced investment team and sizable financial capacity”, said Grede, “but above all because of our business processes, which we continually work to improve.” Deutsche Beteiligungs AG completed four transactions in 2014 and, as in 2013 (three out of 23 transactions), was the most active financial investor in Germany’s mid-market segment. Over an extended period of time, DBAG has also been among the leading financial investors in its market segment: only one competitor, Equistone (formerly Barclays Private Equity), has more transactions to its account than DBAG.

In DBAG’s opinion, a key driver of the transaction activity in the private equity business is still the available liquidity: firstly, private equity funds have received huge streams of capital commitments and must now invest these assets. Secondly, there is a sufficient supply of acquisition finance available. “We do not expect this situation to change fundamentally in the coming period of time,” said DBAG Spokesman of the Board of Management Grede at the annual press conference, where the market data was presented today.