DGAP-News: Study: Private equity sector growth with medium-sized companies / financial resources available for investments increase again
(firmenpresse) - DGAP-News: Rödl&Partner GbR / Key word(s): Study/Private Equity
Study: Private equity sector growth with medium-sized companies /
financial resources available for investments increase again
04.07.2013 / 08:58
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- Focus on medium-sized companies: investments up to 50 million euros
increase
- Health sector and mechanical and plant engineering most attractive for
investors
- Bavaria top target for private equity investments
Munich, 4th July, 2013: Private equity companies focussed on medium-sized
companies are enjoying an upswing. Greater financial resources are
available again for 2013. The competition for attractive companies will,
however, continue to intensify and the prices for acquisitions are
increasing. Inflated purchase prices are consequently deal killer no. 1.
The health sector attracts the most investors, followed by the mechanical
and plant engineering industries and the clean-tech industry. Regionally
Bavaria comes in front of North Rhine-Westphalia and Baden-Württemberg as
the most attractive German state for private equity investments. These are
the main findings of the Rödl&Partner study 'The German private equity
sector in 2013'. In the spring of 2013 more than 300 private equity
companies in Germany were exclusively consulted for the survey.
'Due to the lack of mega deals the private equity companies are
successfully concentrating on German medium-sized companies. The coffers of
the private equity companies are well filled. Given the positive economic
environment an increasing number of exits can again be reckoned with',
explains managing partner Wolfgang Kraus.
Private equity companies increasingly invest in medium-sized companies
The greater part of the investments for new private equity holdings is made
below the limit of 50 million euros and the share is increasing
significantly. The focus of the private equity companies on medium-sized
companies is also reflected in longer holding periods with investments
running on average for 6 or 7 years. The most important reason for the
entry of PE investors is the organisation of the company succession before
the financing of operating growth and spin-offs. On the other hand the
credit squeeze and independence from banks for financing now only play a
minor role.
'Private equity companies are today a mainstay for the financing of
medium-sized companies. They bring in new capital and important know-how
and support companies with their strategic realignment. An exit from a
holding can generate returns of between 10% and 20%', explains Björn
Stübiger, corporate finance manager at Rödl&Partner. ' German
medium-sized companies are attracting investors from all over the world. PE
companies, family offices, and strategic investors from Germany and abroad
are all wooing attractive target companies. However, this is driving prices
upwards. The chances of a successful private equity investment are rare.'
The increasing competition has already had a strong impact. Inflated
purchase prices for entry are reducing profits and in the meantime yields
of over 20% have become rare. At the same time the number of portfolios
with a negative development have gone up. The most important reasons for
this are management errors, development of the market and distribution
problems. In particular the fall in demand in the euro zone crisis
countries has made things difficult for many companies. Partly due to the
limitation of subsidies in the boom countries of Italy and Spain, extensive
investments in recent years in the area of renewable energy have also
frequently not paid off.
Health sector and mechanical and plant engineering in front of the
clean-tech industry
Against the background of declining business in the field of renewable
energy, the health sector including the field of medical engineering is top
of the list of the most important areas for private equity investors. The
mechanical and plant engineering industries are in second place. The
clean-tech field as a former leader is now in third place, closely followed
by the information and communications technology. However, if one examines
the market for growth capital, the ranking is led by the fields of life
science, ICT and software.
Bavaria in front of North Rhine-Westphalia as top target for PE investments
The most attractive German state for the private investment sector remains
Bavaria (27%), closely followed by North Rhine-Westphalia (23%).
Baden-Württemberg is in third place (16%) but continues to lose ground to
the leaders. The most attractive location for start-up companies is Berlin
(8%) in fourth place and for investments under 5 million euros the capital
is behind Bavaria in second place.
'Bavaria's top position is the result of the excellent investment
environment for young companies and strong medium-sized companies',
emphasises Stübiger. 'Over many years the right decisions have been taken
to promote high-growth companies.' Only in the area of investments above 50
million euros is North Rhine-Westphalia just in front of Bavaria and
Baden-Württemberg is in first place. Berlin on the other hand benefits from
the development of the start-up culture particularly for IT, communications
technology and the media industry.
Weak environment up to now for venture capital in Germany
Investors which make growth capital available to young companies were also
integrated in the study for the first time. The result shows that the
financial resources available for start-ups in Germany are insufficient and
available for too short a time. 60% of the financial resources were only
made available for a maximum of 18 months and 80% of the funds were under 3
million euros with 60% even below 1.5 million euros.
'The financing situation remains critical for company founders. After the
early stage hardly any investment funds are available', explains Gerhard
Wacker, manager of the venture capital practice at Rödl&Partner. 'A large
part of the financing comes from business angels, family offices and
friends and family of the founder. Then there are the high tech start-up
funds, without which the start-up scene would be dismal. This opens up an
attractive market niche for the PE companies.'
Click here to order the study 'The German private equity sector in 2013'
(in German): www.roedl.de/PE-Studie-2013
Printed version of the study
A printed version of the study (in German) is available from Rödl&Partner
in Munich. Please contact: Regina Völker, Tel.: +49-89-928780-525, Email:
regina.voelker(at)roedl.com.
Your contact partners:
Wolfgang Kraus, Certified Public Accountant, Certified Tax Consultant,
Managing Partner
Tel.: +49-911-9193-3333, Email: wolfgang.kraus(at)roedl.com
Björn Stübiger, Partner, Head of Corporate Finance
Tel.: +49-89-928780-515, Email: bjoern.stuebiger(at)roedl.com
Gerhard Wacker, Attorney at Law (Germany), Partner
Tel.: +49-911-9193-1306, Email: gerhard.wacker(at)roedl.com
About Rödl&Partner
Rödl&Partner is active at 91 wholly-owned locations in 40 countries. The
integrated firm for audit, legal, management and tax consulting owes its
dynamic success to 3.500 entrepreneurial minded partners and colleagues. In
close collaboration with our clients we develop information for
well-founded economic, tax, legal and IT decisions that we implement
together - both nationally and internationally.
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.
More information on Rödl&Partner is available at www.roedl.com.
End of financial news
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Datum: 04.07.2013 - 08:58 Uhr
Sprache: Deutsch
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