German daughters and sons many times do not want to follow their parents’ business, but want to start their own company. In Germany where you can find many medium sized companies (Mittelstand) with an important economic impact, this lack of interest becomes a serious problem, also for the staff. Their is a risk of thousand of companies to die if they cannot find a successor. For the moment just half of the owners inherit their business to their children. If you look for an interesting investment that works than have a look here and listen what Michael Rohrmaier has to say.
Why there are so many companies at sale right now?
We experience a growth in sales because of the problem of missing successors. That is not only that there is no successor available, but also that the owners have children who do not want to follow the path of their parents. In addition we see owners at the mid 40s who want to have a different experience in their life and therefore decide to sell their company.
Is there less interest of families to go on with their business than before?
Absolutely, that is part of the successor problem. In the past it was without question that the children take over the business, nowadays we often see that the children do not want to follow as they have other interests and also see the workload of the parents which does not seem to be attractive.
How do you calculate the value of a company?
The most common way of calculating the value of a company is to make a discounted cashflow calculation. But this is not as easy as it seems – the business plan has to be reasonable and should be verified, the discount rate has to be set right and the maths have to be done correctly. This needs some experience as well as market knowledge.
Who acquires right now German companies?
We hear that for the big deals of course the Chinese are top investors, but in our core business, from 3-100 Mio. euros, a lot comes from Germany itself as well as European countries. Most likely to enter a market or buy market shares.
Are the investors principally institutional?
Most of them are institutional investors, but we also have private investors who are interested in acquiring companies. The big difference is that companies look for a strategic fit whereas other institutional or private investors are more open for opportunities.
What happens normally with the staff?
That depends on the investor. If the acquired company is integrated in an existing structure often the sales people and workers will be part of the new company, while the administration and accounting face the risk of being laid off. But it depends on the case.
How important is communication in the whole deal?
Very important. This is why we also offer post merger integration services as a good deal can become a bad decision if you do not handle the integration process correctly. If the acquired people then leave a part of the deal loses its worth immediately.
Where are the most companies at sale right now?
The biggest demand is in the industry sector. But also the service sector shows a lot of potential. The investors still like to invest in old economy, but are looking for companies that show potential for digitalization.
Normally just companies with financial problems are at sale?
Absolutely not. Of course there is a percentage of companies in a struggle, but for some investors, who know how to make a turnaround, this is an opportunity. But our portfolio shows a majority of companies in good shape that look for investors.
A part from Due Diligence what should I consider before buying?
What is the additional benefit and how can I integrate the structure.
There has been launched a German tv-programme focused on finding successors “Thronfolger gesucht”, which shows how urgent it is to save many of these companies.