ALTERNATIVE FINANCING FORMS
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3 questions to smart minds

Current market developments in M&A transactions by private equity investors

For this 3 questions to Stefan Jaecker

DC Advi­sory
Photo: S. Jaecker | DC Advisory
4. June 2014

The mood in the Euro­pean private equity (PE) indus­try is once again posi­tive despite the ongo­ing euro crisis. The outlook for the Euro­pean private equity market is good. This is because the avai­la­bi­lity of attrac­tive proper­ties to buy and the over­all econo­mic situa­tion are boos­ting the M&A market here. While the mood among PE inves­tors was still restrai­ned in 2013, nume­rous deals of all sizes are expec­ted for the current year. 


For this 3 ques­ti­ons to Chair­man of the Manage­ment Board/CEO of DC Advi­sory, Frank­furt am Main

1. How do stra­te­gic inves­tors and private equity houses assess the current market pros­pects for M&A transactions?

Curr­ently, an increase in tran­sac­tion volu­mes can be obser­ved in both corpo­rate and private equity tran­sac­tions. The gene­ral condi­ti­ons for private equity inves­tors are still right, espe­ci­ally with regard to finan­cing. In the corpo­rate sector, US and Asian buyers in parti­cu­lar are active in the German market. Howe­ver, for both inves­tor groups, the demand for invest­ment oppor­tu­ni­ties exceeds the supply of companies.

2. How attrac­tive are direct invest­ments in medium-sized compa­nies as an invest­ment focus for entre­pre­neu­rial fami­lies (family equity)?

Direct invest­ments in medium-sized compa­nies are very attrac­tive for entre­pre­neu­rial fami­lies, espe­ci­ally if the medium-sized company is a family-run busi­ness. This is where inte­rests and under­stan­ding of the same kind often come toge­ther in the manage­ment of a company.

Which increa­ses the likeli­hood of getting in on the action.

3. How can compli­ance risks and dispu­tes after busi­ness combi­na­ti­ons be mini­mi­zed in a targe­ted manner?

There are a number of mecha­nisms for this, ranging from purchase agree­ments to insu­rance poli­cies. Howe­ver, this does not change the fact that a good due dili­gence should be carried out before acqui­ring a company and that in most cases there is a resi­dual risk.

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