German mid-market buyouts in 2016: The DBAG Mid-Market … · 2017-06-09 · 25 January 2017 1/6...
Transcript of German mid-market buyouts in 2016: The DBAG Mid-Market … · 2017-06-09 · 25 January 2017 1/6...
25 January 2017
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German mid-market buyouts in 2016:
The DBAG Mid-Market-Private-Equity-Monitor
in collaboration with FINANCE
“High, but not over-valued” – survey on valuation levels in the German
private equity market
Investment managers at more than 50 private equity firms operating in Germa-
ny are polled twice a year on behalf of Deutsche Beteiligungs AG (DBAG) by
FINANCE magazine about trends in the German mid-market segment. In the
survey conducted at year-end 2016, only five percent of the investment manag-
ers interviewed stated that valuation levels were “normal when compared over the long term”; 86 percent termed prices as being “expensive”. Eight percent of the respondents even consider prices to be “dangerously excessive”. In some areas, the professionals interviewed see a risk of excessive valuations. In par-
ticular, the prices for medical engineering and technology companies are now
so high that there is a threat of a bubble forming in these sectors. By contrast,
trading firms are considered the least over-valued, along with automotive sup-
pliers and mechanical and plant engineering companies.
Source: DBAG Mid-Market-Private-Equity-Monitor in collaboration with FINANCE; Survey among investment managers at more than 50 private equity firms
5%
86%
8%
How would you evaluate overall valuation levels in the German
private equity market?
Normal whencompared over thelong term
Expensive
Dangerouslyexcessive
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Multiple answers possible Source: DBAG Mid-Market-Private-Equity-Monitor in collaboration with FINANCE; Survey among investment managers at more than 50 private equity firms
Multiple answers possible Source: DBAG Mid-Market-Private-Equity-Monitor in collaboration with FINANCE; Survey among investment managers at more than 50 private equity firms
8%
10%
17%
17%
22%
22%
29%
39%
73%
83%
Trade
Food and beverage
Automotive
Mechanical and plant engineering
Chemicals
Consumer goods
Cleantech
Services
Technology
Medical engineering
In which sectors have prices increased most strongly?
8%
12%
14%
17%
24%
25%
31%
36%
54%
64%
Food and beverage
Trade
Chemicals
Consumer goods
Mechanical and plant engineering
Automotive
Services
Cleantech
Medical engineering
Technology
In which sectors do you see a risk of excessive valuations and bubble forming?
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The Midmarket-Private-Equity-Monitor shows that financial investors are rely-
ing on sustainable strategies to a growing extent in order to support manage-
ments in developing the companies and thereby increasing their value. Only
eight percent of the investment managers interviewed consider financial engi-
neering to be a promising value creation strategy.
Multiple answers possible Source: DBAG Mid-Market-Private-Equity-Monitor in collaboration with FINANCE; Survey among investment managers at more than 50 private equity firms
2016 buyout market at near record level – market statistics
Financial investors structured more buyouts in Germany’s “Mittelstand” in
2016 than they had since record year 2007. Half of the transactions – 17 out of
a total of 34 – related to sectors in which the price trend has been less dynamic
recently. Every fifth transaction (seven of 34) involved an automotive supplier.
Compared to the preceding year, the proportion of industrial companies among
mid-market buyouts declined: in 2015, they accounted for approximately half
of the 30 transactions, and in 2016 for only about a third.
The statistics relate exclusively to majority takeovers by financial investors in
which the target company’s management co-invests and which have a transac-
tion 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.
Private equity firms sponsored buyouts last year in Germany’s “Mittelstand” valued at approximately 3.6 billion euros; the previous year it was 2.7 billion
8% 12%
46%
59% 63%
71%
FinancialEngineering
Repositioning/Buy andBreak
Costreduction/efficiency
Expansionof
business units
Internatio-nalisation
Buy and Build
Which value creation strategy do you consider most promising?
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euros. The average enterprise value rose by 15 percent to some 105 million
euros. The majority of transactions (23 of 34) were attributable to the seg-
ment’s lower end (enterprise value: 50 to 100 million euros). Mid-market MBOs in 2016 Target Vendor Financial Investor
Interforum Founder Bregal Unternehmerkapital
Elatec Stefan Härtel and other previous investors
DPE Deutsche Private Equity
Gala-Kerzen Langhammer family Equistone
Binder-Gruppe Hans and Ottmar Binder Bregal Unternehmerkapital
Hamm-Reno Gruppe Siegfried Kaske, Hamm family
Capiton, Ziylan-Gruppe
WST Präzisionstechnik Finatem Cathay Capital
Hennecke Adcuram Capvis
IHSE Founder Brockhaus Private Equity
Schlemmer Hannover Finanz, Mackprang
3i
AppelrathCüpper Advent OpCapita
Inexio Founder, Management Warburg Pincus, DBAG
Losberger HIG Capital Gilde
Frimo Hans-Günther Bayer, Rainer Wittkorn
DBAG
GBA Laborgruppe Adiuva Capital Quadriga
Onlineprinters TA Associates Bregal Unternehmerkapital
Polytech Founder DBAG
Exocad Fraunhofer Institut, founder Carlyle
Pavis Previous shareholders Paragon
Parador Hüls-Gruppe Nord Holding
Ruf-Bett Hüls-Gruppe Nord Holding
GEV Previous shareholders Riverside
Dermatologikum Hamburg Volker Steinkraus and others
ECM
Utimaco Pinova, BIP Investment Partners
EQT
Raith Hannover Finanz Capiton
Drahtzug Stein Founding family Emeram
Schock HQ Equita IK Investment Partners
Deutsche Intensivpflege Holding
Delta Equity Ergon Capital
Schwind Eye-Tech-Solutions Founder Ardian
Braun Seafort DBAG
Moeschter Jürgen Möschter Hannover Finanz
Fischer Surface Technologies Family shareholders DPE Deutsche Private Equity
Hoffmann Fördertechnik Owner family Afinum
Chicco di Cafe Previous shareholders Paragon
Achat Hotels Previous shareholders Hannover Finanz
Majority takeovers by financial investors via MBO, MBI, secondary/tertiary buyouts; Transaction value: €50-250mn Source: public information, research by FINANCE und DBAG
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Majority takeovers by financial investors via MBO, MBI, secondary/tertiary buyouts; Transaction value: €50-250mn Source: public information, research by FINANCE und DBAG
Majority takeovers by financial investors via MBO, MBI, secondary/tertiary buyouts; Transaction value: €50-250mn Source: public information, research by FINANCE und DBAG
21
11
20 25
34 36
26
12
24
31 29
23
31 30 34
1,939
1,500
2,093
3,000
4,030
3,660
2,420
1,450
2,800
3,530 3,495
2,270
3,196
2,735
3,560
0
500
1000
1500
2000
2500
3000
3500
4000
4500
0
5
10
15
20
25
30
35
40
MID-MARKET MBOs IN GERMANY Transaction value: €50-250mn
Number Value (€mn)
24 20
7
14 16 16
18 19
24 23
6
5
2
4
11
5 2
8
3 8
6
1
3
6
4
8
3
4 3
3
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
MID-MARKET MBOs IN GERMANY by transaction value
€50-100mn €100-175mn €175-250mn
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Majority takeovers by financial investors via MBO, MBI, secondary/tertiary buyouts; Transaction value: €50-250mn Source: public information, research by FINANCE und DBAG
An unusually high number of buyouts originated from family-owned compa-
nies in 2016. In ten instances, or in nearly every third case, succession was
arranged through a buyout in the role of the majority owner. This represents by
far the highest share of family succession arrangements through buyouts in 15
years.
Majority takeovers by financial investors via MBO, MBI, secondary/tertiary buyouts; Transaction value: €50-250mn Source: public information, research by FINANCE und DBAG
7
1
3
5
18
2016
Automotive
Mechanical andplant engineeringChemicals
Services
Healthcare
Other
24
17
10 15
4
71
2004-2008
Automotive
Mechanical andplant engineeringChemicals
Services
Healthcare
Other
18 12
17
11
18
92
2010-2015
Automotive
Mechanical andplant engineeringChemicals
Services
Healthcare
Other
19 14
10 9 14
9 11 13
20
12
14
9
1
12
15
13 9
14
8
12
3
3
1
3
2
7
3
4 2 10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
MID-MARKET MBOs IN GERMANY by type of transaction
Spin-offs Secondaries / Tertiaries Family succession