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.