DGAP-News: PRIVATE EQUITY IN GERMANY GOES 'MITTELSTAND'; RÖDL&PARTNER STUDY: MORE&MORE BUSINESSES FINANCE GROWTH WITH RISK CAPITAL
(firmenpresse) - Rödl&Partner GbR / Miscellaneous
28.04.2010 10:00
Dissemination of a Financial News, transmitted by
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PRIVATE EQUITY IN GERMANY GOES 'MITTELSTAND'
RÖDL&PARTNER STUDY: MORE&MORE BUSINESSES FINANCE GROWTH WITH RISK
CAPITAL
- Private equity firms increasingly accept minority holdings
- 80 per cent of equity capital invested in German 'Mittelstand' firms
- Bavaria ahead of North Rhine-Westphalia as most attractive state for
venture capitalists
Frankfurt/Munich, April 28, 2010: More and more mittelstand businesses are
financing their growth with equity capital. With the absence of 'Big
Deals', the private equity industry is concentrating on smaller businesses.
In doing so, the industry is increasingly ready to abandon its claim of
majority holding. Investment companies are particularly focusing on
businesses in the information technology, cleantech, medical engineering
and biotechnology industries. Bavaria asserts itself as the most attractive
German state for financial investors, ahead of North Rhine-Westphalia and
Baden-Württemberg. This is revealed in a poll of private equity companies
in Germany from the professional service firm, Rödl&Partner.
'Equity capital is becoming normal in mittelstand firms', explained
Wolfgang Kraus, Manag-ing Partner of Rödl&Partner. 'The start of the
economic revival will, in growing numbers, be financed through private
equity firms. The mittelstand businesses are ready to take on financial
investments because they want to grow. Thereby, investors are gradually
giving up control of the majority of their shares and are increasingly
relinquishing their claim to power.'
After the most severe financial and economic crisis in post-war history,
the mood in the field is reservedly optimistic. 66 per cent of those
questioned in investment companies expect that the private equity market
will develop positively and 6 per cent of those believe the development
will be much more positive than last year's development. In particular, the
first successful IPOs offer hope. The difficult fiscal environment of the
private equity field is nevertheless still said to be the main force in
slowing down the positive development.
'The difficult business environment for exits has forced the investment
companies into long term commitments. The mittelstand welcomes this. But
all investments are long-term involve-ments', emphasises Björn Stübiger,
Partner at Rödl&Partner, which carried out the study. 'The key question
is whether the return to stable underlying data with a considerable
entrepreneurial potential to increase value will occur. Politicians are
also required to improve the general conditions and in particular
conditions for venture capital investments with harmonization at an
international level', explained the corporate finance expert.
In the spring of 2010, Rödl&Partner consulted more than 300 investment
companies operating in Germany. The response rate of 38% makes the survey
results representative. International companies and private equity
companies with a private and public background were asked about their
investment behaviour in Germany. 'The study reflects the versatility of thefield. One shouldn't just reduce private equity down to big deals. Then you
can see how active the market is despite the financial crisis', says
Stübiger.
While the private equity companies have adapted their investment strategy
to the market environment, many investments fail just as before due to the
unrealistic price expectations of companies. Given the reluctance of banks
to finance acquisitions via loans, a holding often fails because of the
excessive purchase price.
The field is focusing on IT as a new front-runner industry
The IT field represents the best opportunity for equity investment
financing (44.4%). Investors see IT as particularly attractive, followed by
environmental technology (35.2%), medical engineering and biotechnology
(both 29.6%). While IT companies had previously taken up the middle of the
field, the investment focus has changed considerably. This is also true for
regenerative energy which has pushed its way up to the fifth ranking
position. 'The power of the companies to innovate is the key to gettingventure capital financing', explains Stübiger. 'Even in traditional fields
such as mechanical engineering financial investors are becoming more active
if the company enjoys good growth and especially uses innovative
technology.'
Bavaria is ahead as the most attractive state for private equity firms
Once again the so-called 'free state' of Bavaria by a long way attracts the
most financial investors (35.5%), followed by North-Rhine Westphalia
(27.8%) and Baden-Württemberg (18.5%). In eastern Germany only the free
state of Saxony (4.3%) is able to hold its own. The usual reason given is
the economic structure, the number of attractive companies and the active
founders' scene in the respectively preferred regions named. The
significance of this appraisement is high. 'Where German states are
successfully able to attract venture capital, there are better conditions
for growth in the economy', points out Kraus. 'So it's worthwhile creating
the right conditions to encourage the commitment of investors.'
Conclusion: 'Locusts can turn into grasshoppers which are able to revive
the economy'
The mittelstand is repositioning itself again ready for growth. In Germany
venture capitalists are concentrating on investing in innovative and often
internationally active mittelstand com-panies in this current upswing. 'The
venture capital field and the mittelstand have moved considerably closer
together. Confidence has risen that companies will grow and majority
takeovers have given way to long-term, sustainable investments. Companies
ready to make the jump into new markets see venture capital as an
attractive financing option', as the results of the study are summarised by
Kraus. 'Now it's time for politicians to recognise the chances on offer
from investors. It's high time public awareness moved on from the locust
image.'
Your contact partners:
Wolfgang Kraus, certified public accountant, certified tax consultant,
managing partner
Tel.: +49-911-9193-3333, E-Mail: wolfgang.kraus(at)roedl.de
Björn Stübiger, Partner, head of Corporate Finance
Tel.: +49-89-928780-515, E-Mail: bjoern.stuebiger(at)roedl.com
You may download photographs of the contact partners free of charge from
the Rödl&Part-ner Press Centre at www.roedl.de/pressecenter.
The study (in German) may be ordered from Rödl&Partner Munich. Please
contact Regina Völker: Tel.: +49-8992-8780-525, E-Mail:
regina.voelker(at)roedl.com
About Rödl&Partner
Rödl&Partner is one of the leading German professional service firms.
Rödl&Partner assists companies in their business activities throughout
the world. The firm's core business is focused on audit, accounting, tax
and legal advisory services. The firm employs a staff of 3,000. Rödl&Partner is represented by more than 80 offices in 40 countries in all major
industrial nations in the world, in particular in Central and Eastern
Europe, Western Europe, Asia, Africa, the Middle East and the Americas.
The corporate finance division of Rödl&Partner advises companies on
raising capital via the capital market, strategic partnerships, M&A
transactions and the strengthening of equity via private equity and venture
capital. The lawyers, tax consultants, accountants and corporate finance
experts of Rödl&Partner have extensive experience in the field of
financing strategies, IPO consulting, capital increases, with legal, tax
and financial due diligence audits and with company acquisitions and
disposals in Germany and other countries.
To find out more about Rödl&Partner, visit www.roedl.com
Press contact:
Eye Communications
Matthias Struwe MSc MA
Stühlingerstr. 24
79106 Freiburg, Germany
Tel.: +49-761-1376 221
Fax: +49-761-1376 224
Mobile: +49-171-8893 704
E-Mail: m.struwe(at)eyecommunications.de
Internet: www.eyecommunications.de
Photos will be distributed by mecom-bildkanal and available at
http://ir-cockpit.equitystory.com/cgi-bin/fncls.ssp?fn=mecomi&news_id=87420
Caption: Rödl&Partner: Grafiken Beteiligungsstudie 2010
28.04.2010 10:00 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv atwww.dgap-medientreff.deandwww.dgap.de---------------------------------------------------------------------------
Language: English
Company: Rödl&Partner GbRÄußere Sulzbacher Straße 100
90491 Nürnberg
Deutschland
Internet: www.roedl.de
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