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

TargetVendorFinancial investor
Ada CosmeticsCarlyleArdian
AmoenaGranville, Baird CapitalHalder
Ask ChemicalsClariant, AshlandRhone Capital
BU DriveCompany founderDPE Deutsche Private Equity
CamanoFormer partnerAfinum
CasekingAfinumEquistone
Comcave CollegeMaximilian A. JaberGilde
dtmsNetrada HoldingParagon
DuranAdcuramOne Equity Partners
Engelmann SensorBrendecke familyCapiton, Nord Holding
Gienanth Iron FoundryGienanth HoldingDBAG
Huhtamaki FilmsHuhtamakiDBAG
HusselDouglasEmeram
J&S AutomotiveFinatemBrockhaus
J.H. ZieglerUnger Group, Staufen InvestDPE Deutsche Private Equity
Jet GroupH2 EquityEgeria
Koller GruppeFounding familyHannover Finanz
LeitnerBlankenburg familyECM
Meridian SpaPrivate investorsAfinum
Munich Building TechnologiesFounding familyEquistone
PfaudlerNational OilwellValcoDBAG
PIA Performance InteractiveDiverse former partnersEquistone
Prefere ResinsDynea ChemicalsCapiton
SausalitosEQT ExpansionErgon
SchleichHgCapitalArdian
Stora Enso UetersenStora EnsoPerusa
Time PartnerCreditors/financial institutesAuctus
TransnormEquitaIK Investment Partners
Unser HeimatbäckerSteadfastDBAG
Vion Food Convenience RetailsVion FoodParagon
Windstar MedicalFormer ownerEquita

 

“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.