Proventis M&A Review 1. half year 2015
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Transcript of Proventis M&A Review 1. half year 2015
Proventis Partners
Mergers & Acquisitions Review
First half of 2015
Hamburg | Munich | Zurich
September 13, 2015
Page 2
September 2015
M&A Review First half of 2015 – Proventis Partners
1 – M&A Market Development
2 – Our Closings during the first half of 2015
3 – The Proventis Partners Leadership Team
4 – How to contact us
Content
Page 3
September 2015
M&A Review First half of 2015 – Proventis Partners
Review M&A market during the first half of 2015.
1 – M&A Market Development
The first half of 2015 was marked by a dynamic M&A market in Germany – notably in the Small & Mid-
Cap M&A segment. The Swiss and Austrian markets were weaker than in previous years.
Germany – During the first half of 2015, German companies were involved in more than 450 mergers and
acquisitions (first half of 2014: 363 deals), which is an increase of almost a quarter.
At the same time, the recorded volume of transactions has significantly declined. It amounted to Euro 15.4
billion in the first six months of 2015 compared to Euro 40 billion in the first half of 2014. This suggests a
significant decline in mega-transactions and a strong increase in Small & Mid-Cap M&A transactions.
In terms of industry, the focus of deals is on services (140 deals) and financial services (126 deals). They
are followed by media with 71 deals, 69 engineering deals and IT / telecommunications with 63
transactions.
Analyzing the geographical coverage, half of all transactions were carried out purely within Germany. The
other half is distributed to almost 30% foreign buyers acquiring German companies and about 20%
German buyers who have invested abroad.
The private equity segment was marked in the first half by an increasing number of add-on transactions,
fueled by a very positive debt re-financing environment and a high number of available targets.
Furthermore, an increasing focus on exits was noted that met corporates with “M&A-appetite” and
financially well-funded Secondary Buyout funds.
Sources: BvK, Zephyr, M&A Review
Source: M&A Review/University of St. Gall
M&A market Germany
Number of deals first half of 2015 compared to 2014.
129197
234
255
First half
year 2014
363
First half
year 2015
452
+25%
Q1
Q2
Page 4
September 2015
M&A Review First half of 2015 – Proventis Partners
Review M&A market during the first half of 2015 (continued).
1 – M&A Market Development
2010 2013 2011 2015
1,000
500
0
2016
1,250
2014
250
2012
750
A
CH
D
Source: M&A Review/University of St. Gall
Analysis Proventis Partners
Market development Germany, Austria and
Switzerland
Number of deals 2010 – 2014;
Proventis estimates for 2015 and 2016 .
Switzerland – The performance of the M&A market with Swiss participation during first and second
quarter 2015 was weaker compared to 2014. Only 130 Closings were recorded, this is much less than the
long-term average. Since the decision of the Swiss National Bank in January this year, the Swiss Franc is
too strong against the Euro and is clearly retarding the Swiss economy, and in particular the export
oriented sectors (e.g. chemicals, construction materials, mechanical and electrical engineering, retail and
consumer goods). The Seco (Swiss State Secretariat for Economic Affairs) reported a first-quarter decline
in GDP, while at the end of the second quarter, a slight increase was recorded. Whether the Swiss
economy could really avoid a recession remains to be seen. The strong Swiss franc is in any case
hindering economic growth.
However, the described decline in the number of M&A transaction mainly affects large deals. The last
quarters of the Swiss M&A market were characterized by large mergers such as Lafarge / Holcim, and the
takeover of HolcimLafarge assets by the Irish CRH or the majority takeover of World Duty Free by Dufry,
while no such big deals in Q2 were closed. A notable transaction is the announced merger between the
German family enterprise Dorma and the Swiss company Kaba. The merged company will become the
number two behind Assa Abloy in the global market of access control.
In the Small & Mid-Cap M&A market (with transactions up to CHF 500 million), which is most relevant for
Proventis Partners, a strong restraint at the beginning of the year was felt, as many directors
(Verwaltungsräte) wanted to wait and see how the exchange rate situation develops. However, from about
June onwards, the market recovered.
Austria – The first semester in the Austrian M&A market was rather restrained and thus the moderate
market development (in comparison with the German market) continued.
Page 5
September 2015
M&A Review First half of 2015 – Proventis Partners
Outlook M&A market 2015/2016.
1 – M&A Market Development
Germany – Looking at the current market evolution, we expect uninterrupted market dynamics during the
second half of 2015, in particular in the Small & Mid-Cap M&A segment. There are manifold transaction
rationales for M&A deals: market consolidation, succession issues, acquisitions of technology, capital
deployment pressure and positive debt financing environment for financial investors, internalization,
market access, etc.
From the M&A perspective we anticipate consistently ambitious company valuations. The high price
expectations are accompanied by ever more extensive due diligence processes, thus negative findings
and disunity in purchase price expectations remain the two most common deal breakers. Though, they
can be compensated with smart deal structures.
It remains a challenging task to assess the macroeconomic parameters for the next months, assessing for
example the Euro sovereign debt crisis, the exchange rate development of the Euro, or the slowdown of
market dynamics of the emerging markets – especially in China – or the development of the energy
sector “Energiewende” in Germany and the stock exchange performance. All these factors impact the
German M&A market. According to leading economic research institutes, Germany is still on a solid
growth path.
The appetite for acquisitions in Germany is currently higher than in the previous years. In our view, there
are several reasons for this increase: the economic uncertainty, and the fluctuation in commodity prices
and currencies drives cross-border acquisitions. Some, especially medium-sized companies are forced to
compensate for lack of innovation or internationalization steps through acquisitions.
Image source: Can Stock Photo
Page 6
September 2015
M&A Review First half of 2015 – Proventis Partners
Outlook M&A market 2015/2016 (continued).
1 – M&A Market Development
Switzerland – In light of the current market development only a modest growth in big deal M&A with
Swiss participation is expected in the second half of 2015 and in 2016. By contrast, we expect a
considerable dynamics in the Small & Mid-Cap segment. M&A is positively evaluated by CEOs and CFOs,
due to the renewed increase in risk appetite of Small & Mid-Cap market participants, which is caused
among other factors by the record-low interest rates and the high purchasing power of the Swiss franc.
This will in our opinion find its continuation in the coming year. However, we believe that the negative
effects of the exchange rate begins to show in the balance sheets and income statements of many export-
oriented SMEs. Reserves are consumed and in many SMEs a liquidity crunch is emerging. This latest
development will revive the M&A market in Switzerland. The rapid sale of distressed com-panies will likely
increase.
Austria – For the Austrian M&A market, we expect – after a weak 2013 and a disappointing 2014 (with
242 transactions) – a similar further development. The Austrian economy, which is mainly composed of
SMEs which are often family-owned, is usually not a target for acquisitions. However, highly specialized
companies, and many global know-how leaders can be found in Austria (e.g. in the energy, telecom, real
estate and tourism sectors). In particular, the cross-border nature of many transactions is significant. An
estimated more than two thirds of the Austrian transactions contain an international angle (traditionally
with participation from Germany, the United States or Switzerland). Overall, the Austrian M&A market is a
Small & Mid-Cap market, even more than the German and Swiss market.
In this environment Proventis Partners plans to defend its market position in the Swiss and Austrian Small
& Mid-Cap M&A market and will further expand.
Image source: Can Stock Photo
Page 7
September 2015
M&A Review First half of 2015 – Proventis Partners
1 – M&A Market Development
2 – Our Closings during the first half of 2015
3 – The Proventis Partners Leadership Team
4 – How to contact us
Content
Page 8
September 2015
M&A Review First half of 2015 – Proventis Partners
Sale of the building materials group Max Dietrich to Ammon Group.
2 – Our Closings during the first half of 2015
Sell-side M&A
Building materials sector
In February 2015, the Ammon
Group acquired 100% of the
company shares in the Munich
based building materials trade
group
Max Dietrich GmbH as part of a
succession solution.
Requirements and scope
Max Dietrich Group is a family business in the fourth generation. The company,
headquartered in Munich, consists of two business units, the DIETRICH Türtechnik
GmbH & Co. KG – a strong specialist wholesaler for all the products required by the
processors in the range door and safety engineering and DIETRICH Security
Systems – an innovative system specialist and full service provider for electronic and
mechanical door and security systems. The challenge for Proventis was to identify a
buyer being committed to both the Munich location and to invest into the future
growth of the business.
Assignment and value added by Proventis
The role of Proventis was to seek a culturally appropriate buyer who maintains on
the one hand the “DNA” of Dietrich Group but, on the other hand, was willing to pay
an appropriate price for the group. Furthermore, a smooth and fast transition had to
be negotiated since the seller was tied up in other projects that require his full
attention. This has been achieved with the acquisition by the Ammon Group from
Northern Bavaria.
Contact
Jan Poerschmann, Proventis Partners München, [email protected] Proventis Partners
Exclusive M&A Advisor to the Seller
Page 9
September 2015
M&A Review First half of 2015 – Proventis Partners
Sale of Sitag Ltd. (Switzerland) to Nowy Styl Group (Poland).
2 – Our Closings during the first half of 2015
Sell side M&A
Office furniture sector
Requirements and scope
Proventis Partners has accompanied Nimbus, a Dutch Private Equity Company, as
exclusive M&A advisor with the sale of its Swiss portfolio-company Sitag AG. Sitag is
a high-end quality office furniture company.
Proventis Partners identified one of the leading European office furniture players in
Poland as final best owner in a challenging market environment.
Assignment and value added by Proventis Partners
In this type of M&A transaction, the Proventis team could exploit its strengths
particularly well: this cross-border transaction required a good sense of language and
cultural differences as well as the complexity of the different jurisdictions. In addition,
the needs of a private equity house had to be reconciled with this of a strategic
investor. Proventis Partners ensured a smooth cooperation between the buyer and
seller as well as with the Swiss M&A lawyer, which was crucial for the success of this
complex transaction.
Contact
Teun de Ven, Proventis Partners Zurich, [email protected] Proventis Partners
M&A Lead Advisor to Nimbus Private
Equity (Netherlands).
Sale of Sitag Ltd, a Swiss company
in the office chair and furniture
industry with headquarters in
Sennwald to the Polish company
Nowy Styl Group, the number three
European company in office
furniture. Sitag was a portfolio
company of the Dutch Private
Equity company
Nimbus B.V.
Page 10
September 2015
M&A Review First half of 2015 – Proventis Partners
Sell side M&A
Media sector
Requirements and scope
The European Professional Publishing Group (EPPG), based in Munich, has
developed since 2008 a publishing group with a broad media portfolio for the
segments construc-tion and architecture, retail, hospitality and fashion by means of a
selective buy & build strategy.
Proventis Partners has been mandated by EPPG to approach acquirers for the retail
and hospitality title in order to generate a competitive bidding environment.
Assignment and value added by Proventis
The task of Proventis was to assist the client in the ongoing M&A negotiations with
the final purchaser on an operational level and to create effective closing pressure –
without a broad market approach.
Contact
Jan Poerschmann, Proventis Partners München, [email protected]
Proventis Partners
Exclusive M&A Advisor to the Seller
Sale of professional publishing group Lebensmittel Praxis to Landwirtschaftsverlag.
2 – Our Closings during the first half of 2015
The European Professional
Publishing Group, one of
Germany's leading specialist
publishing groups, based in
Munich, has sold the assets of the
LPV Media Group to the
Landwirtschaftsverlag Muenster in
February 2015,
Page 11
September 2015
M&A Review First half of 2015 – Proventis Partners
Corporate Finance
Chemicals sector
Requirements and scope
ADDCON has the motto "Green Chemistry" written on its flags. The company refines
organic acids and salts at its production sites at Bitterfeld (Germany) and at
Porsgrunn (Norway). These products are used in the food and feed industries, in oil
exploration as well as in the deicing of large area applications. The company
employs 130 people and can look back on 60 years of history.
For capacity expansion in production for less seasonal products, a mezzanine
financing was needed in addition to existing corporate finance solutions.
Assignment and value added by Proventis
The task of Proventis consisted in convincing possible financial partners
quantitatively and qualitatively of the opportunities and the business potential of
Addcon’s expansion strategy. Through a thorough understanding of the company
and the direct access to the decision-makers at the PartnerFonds AG Proventis has
been able to close the transaction in record time.
Contact
Rainer Wieser, Proventis Partners München, [email protected] Proventis Partners
Corporate Finance Advisor to Addcon
PartnerFonds AG provides a mezzanine facility to the ADDCON group.
2 – Our Closings during the first half of 2015
In April 2015, the ADDCON Holding
GmbH, a leading manufacturer in
specialty chemicals, obtains a
mezzanine finance by the
PartnerFonds AG.
Page 12
September 2015
M&A Review First half of 2015 – Proventis Partners
Sell side M&A
Textile manufacturing sector
Requirements and scope
Proventis Partners advised the shareholders of the well-known European producer
and importer of socks, Crönert, in their sale of the company to Wünsche Group,
helping the Crönert family in finding a succession for their company. The main goal
for the family was to find a strategic and long-term-oriented partner for the future
development of the activities of Crönert. In addition, it was intended that the
operational management remained responsible for day-to-day operations, while the
new partner was capable of providing central administrative support.
Assignment and value added by Proventis
Proventis Partners acted as the exclusive M&A advisor to the Crönert family,
producing the sales documentation, advising and approaching potential buyers,
coordinating the due diligence as well as supporting the transaction structuring and
negotiations. Due to the specific industry know-how, Proventis was able to conduct a
very selective approach of suitable partners and to structure a tailor-made
transaction for all parties. With Wünsche Group, Proventis identified an owner-
managed expanding trading company with complementary products as new
shareholder of Crönert, who is capable of securing a smooth transition of ownership
as well as the sustainable continuation of business.
Contact
Jost Hartmann, Proventis Partners Hamburg, [email protected]
Proventis Partners
Advisor to the sellers
Sale of Crönert to Wünsche Group.
2 – Our Closings during the first half of 2015
Wünsche Group acquired Crönert,
one of the best-known European
producers and importers of socks.
Page 13
September 2015
M&A Review First half of 2015 – Proventis Partners
RTL Group and management of UFA Sports sold the company to Lagardère Unlimited.
2 – Our Closings during the first half of 2015
Sell side M&A
Sport marketing sector
Requirements and scope
RTL Group, the majority owner of UFA Sports was interested in selling the company,
which was no longer considered a core asset for the group. Based on a trusted
business relationship of over twelve years, UFA Sports management mandated
Proventis Partners to secure its interests as minority shareholder throughout the
transaction process.
Assignment and value added by Proventis Partners
Proventis Partners has helped UFA Sports in identifying potential buyers, preparation
of the management forecast as well as the optimization of the transaction structure.
Together with the UFA Sports management, Proventis was able to create a
sustainable solution for UFA Sports and its employees as new part of Lagardère
Unlimited.
Contact
Jost Hartmann, Proventis Partners Hamburg, [email protected]
Proventis Partners
Adviser to the Management
Majority owner RTL Group and
management of UFA Sports, a
leading sports marketing agency,
have sold 100% of the company to
Lagardère Unlimited.
Page 14
September 2015
M&A Review First half of 2015 – Proventis Partners
What clients report about Proventis Partners.
2 – Our Closings during the first half of 2015
Frank Löffler
Investment
Manager
HANNOVER
Finanz
HANNOVER Finanz has worked together with Proventis Partners for many years, whereby we
have mostly acted as an acquiror for companies which have been advised by Proventis on the
sell side. The Proventis team has developed an excellent knowledge and judgment of the
buyer universe for their mandates. We often found a good fit of their views with our
requirements. With Jost Hartmann we have always had a reliable partner who has a
constructive and solution-oriented transaction-style. This is supported by a highly professional
project preparation and efficient implementation process of all Proventis professionals. In this
way we were able to implement several transactions and I am sure that we will cooperate in
the future with confidence at both sides of the table.
Ed van Dijk
Partner
Nimbus Zeist,
NL
Private Equity
Nimbus, a well known Dutch private equity company, experienced Proventis Partners (Teun de
Ven) as a persistent and process-focused M&A advisor for the sale of its Swiss-based office
furniture company Sitag. Proventis Partners identified one of the leading European office
furniture players in Poland as final best owner in a challenging market environment. Moreover,
Proventis Partners took care of a seamless cooperation with the M&A lawyer in this complex
and very competitive transaction. Teun de Ven skillfully helped to negotiate a successful exit
for us. All in all, Proventis Partners proved to be the right choice for this deal.
Page 15
September 2015
M&A Review First half of 2015 – Proventis Partners
What clients report about Proventis Partners.
2 – Our Closings during the first half of 2015
During the last four years the Hamburg team of Proventis Partners successfully accompanied
and advised me on a variety of challenges and several acquisitions. From the very beginning I
was impressed by the deep industry knowledge in the areas of retail and consumer goods and
the excellent network of the team in these sectors. Due to the strong corporate finance skills,
the team is able to efficiently and pragmatically develop business plans and to implement M&A
processes in a target-focused way. I have come to appreciate the long term trusting and close
cooperation with Proventis Partners.
Peter Wolf
Owner
Bree Collection
GmbH
New publications available on our website
www.proventis.com/en/press
(these publications are available in German at this time)
Mergers & Acquisitions – Die zunehmende Wichtigkeit der IT-
Due-Diligence im Rahmen von Unternehmenskäufen
Effekte des starken Schweizer Frankens auf M&A-Aktivitäten
der Industrie (Blitzumfrage)
“M&A Facts” – Development of M&A multiples
in various industry sectors
On our website you may find valuable indications on the prices paid in M&A transactions in various
sector. Our research teams in Germany and Switzerland maintain special databases and review the
capital market’s evaluation of M&A transactions in these sectors.
► http://www.proventis.com/den/ma-facts.html
Media
Mechanical Engineering
Logistics
Industrial Services
Cleantech
Page 16
September 2015
M&A Review First half of 2015 – Proventis Partners
1 – M&A Market Development
2 – Our Closings during the first half of 2015
3 – The Proventis Partners Leadership Team
4 – How to contact us
Content
Page 17
September 2015
M&A Review First half of 2015 – Proventis Partners
Our Directors and Partners.
3 – The Proventis Partners Leadership Team
Teun de Ven
Partner, Zurich
Tel +41 44 536 3630
Dr. Christoph Studinka
Partner, Zurich
Tel +41 44 536 3630
Peter Trinkl
Partner, Zurich
Tel +41 44 536 3630
Jan Pörschmann
Partner, Munich
Tel +49 89 388 881-11
Jost Hartmann
Partner, Hamburg
Tel +49 40 36097 59-0
Rainer Wieser
Partner, Munich
Tel +49 89 388 881-30
Ulrich Schneider
Partner, Hamburg
Tel +49 40 36097 59-0
Dr. Axel Deich
Associate Partner, Munich
Tel +49 89 388 881-0
Dr. Nina Gjukez
Director, Zurich
Tel +41 44 536 3630
Florian Liepert
Director, Munich
Tel +49 89 388 881-12
Page 18
September 2015
M&A Review First half of 2015 – Proventis Partners
1 – M&A Market Development
2 – Our Closings during the first half of 2015
3 – The Proventis Partners Leadership Team
4 – How to contact us
Content
Page 19
September 2015
M&A Review First half of 2015 – Proventis Partners
Proventis Partners at important hubs.
How to contact us
Three offices based in Germany and
Switzerland represent Proventis
Partners. From Hamburg, Munich and
Zurich, a team of approximately 20
professionals supervises national and
international projects. The clients profit
from the regional roots and our partners’
international network.
The local presence provides for short
distances and a deep understanding of
the needs particularly of mid-size
customers. The location at important
hubs broadens the reach for potential
partners in transactions and simplifies
the contact with international purchasers
or sellers. We know: the M&A business
is a global business. Luckily our team
masters ten languages.
Authors of this publication
For questions about this publication or to make use of our long standing
Small & Mid-Cap M&A expertise, please contact:
Dr. Christoph Studinka
Partner, Zurich
Tel +41 44 536 3630
Jan Poerschmann
Partner, Munich
Tel +49 89 388 881-11
Jost Hartmann
Partner, Hamburg
Tel +49 40 36097 59-0