FaMAS‘ selection of TOP active middle market transactions January 2022
Last Friday someone wished me a Happy New Year. To me it feels more like Happy Old Year. The first month has virtually passed and everything continues as it was the last 6 months. Inflation has risen in Germany to highest level (5.3%) since 1993 (5.8%) and corporate transactions are at all time high. Will it continue? Instead of creating a wave of insolvencies (my expectation in 2020 – I am a bad prophet) Corona has lead to pretty much the opposite. Most businesses (in Germany) in our monitoring had a bumper year. What does this mean for corporate acquisitions in Germany? Inflation generally impacts negatively on valuation of companies. Some of these effects can already be seen on German stock exchange, which dropped by about 10% this month until Thursday (recovered a bit meanwhile). My personal observation from speaking to many German companies is that almost everyone has either increased or plans to increase prices. Most complain about shortage of labor. I think inflation is going to last for next 5 years at significantly higher levels than in the past 10 years. Let me know what you think about price increases in your company and labor shortages. What do you think is going to happened to the currency exchange? What do you think about your pricing?