FaMAS‘ selection of TOP active middle market transactions September 2022

What shall we do in this environment? War in Ukraine, high inflation, supply chain problems, energy crisis … ? I get this question asked more often recently and hey, I do not know. A Managing Director from CINVEN, a globally leading PE firm, told me that he is not worried about the global market at […]

FaMAS‘ selection of TOP active middle market transactions March 2022

In March we mark our 15 year anniversary advising foreign clients on doing deals in Germany. We  meanwhile count more than 11000 individuals  from >90 countries who have been in touch  with us on some investment opportunity in the past.  Frankly, most of these have had a romantic  view about German business acquisitions.  Some romantics are still on this mailing list.  I am also a romantic business person and  therefore, let me help you with a few lines.  There are many good reasons why buying a  German company makes sense.  Valuation of German businesses is still lower than  in other parts of the world, most notably USA,  China and India. There are plenty of world class  technology products designed and sold in Germany.  However, there are also many German or local  investors hunting for the same good deals that  foreigners want. Therefore, for people living far  away distance can be a big hurdle.  Recently, I had a call from a billion-USD fund from  Alaska who thought investing in Germany is a good  idea. Professional, serious people. Some of the deals  on our list are interesting for them. Yes, but can  you execute these deals? From Alaska it takes  12 hrs to get to a meeting in Germany. Fly back  another 12 hrs. Add the cost of travelling and  it becomes clear that doing it from Alaska  is not going to work unless you have a specific edge.  Even then.. the first opportunity is likely not  to work out. Some German investors we know  have a ratio of 10:1 on LOI to closure.  Can you want to fly-into Germany every time for a  management meeting? Are you prepared to keep  your motivation high even after 5 failed attempts?   I am not saying it is pointless to try to buy a company  from abroad. Clearly, this is partly the reason  why FaMAS exists. We have helped people from  Canada and from China to acquire companies in  Germany. Yet it takes significant effort, focus,  time and money to get it done. To give it a dollar value,  perhaps USD 25-50k before you can get a deal done.  You can be lucky and get a way with less, but it  is unlikely. It could also cost you a lot more.  Some of our investors have easily spent 250-500k EUR  (incl. DD) before completing their first deal.  In a nutshell, if you are far away and are not willing to  invest significant time and money, then I suggest you should unsubscribe from this newsletter and  focus on something else. That is my advise.  

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? 

FaMAS’ selection of TOP active middle market transactions in February 2021

Today, I had an interesting conversation with an MD of a large German electronics group. He said, one of the biggest challenges in the last 12 months was supply chain disruption. His company had suffered from it in every month since February. He indicated, had he been prepared for it with local suppliers as second […]

Happy New Year from FaMAS!

In Germany, international M&A / finance transactions among SMEs have decreased by around 80%. This was the result of our evaluation of approx. 3000 international investor contacts. All in all, this is good for investors and buyers. They were able to achieve better conditions with less competition. However, this is again bad for companies and […]

Deal flow numbers

As you know FaMAS screens hundreds of transaction per year and communicates with thousands of M&A professionals. Corona impacted in many ways how M&A and Private Equity deals are done. Last time I wrote about changes in valuation. Today I want to shed some observations on deal flow numbers. Here is what happened: Clearly, March, […]

Private Equity

The last weeks I had a fair number of conversations with Private equity investors and target companies in Germany.  Many argued almost the same to market themselves to a respective target company: We are entrepreneurial We are very fast decision makers We work closely with management We focus on x Mio deal size, but we […]

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