2020 6月 25

Difficult, But Feasible: A special M&A year in DACH requires special solutions

Bastian Frien, FINANCE Think Tank

The consensus is in: It has been an extraordinary year for M&A in DACH due to the Coronavirus. Experts Dr. Andreas Hoger, Dr. Sven Oleownik, Moritz von Bodman and Jürgen Zapf were in agreement at the recent online event "M&A 2020 - a year of crisis examined", hosted by Datasite in partnership with FINANCE Think Tank.

Optimism ahead
Markus Schiller, responsible for the DACH region at Datasite, explained that, without the pandemic, 2020 could have been a very good year for M&A, according to Datasite and Mergermarket data. While January and February were very strong months, the slump in the following three months was all the deeper. However, Schiller pointed out that the mood among market participants that had reached a low in March, has been improving every month since then, and that he was therefore quite optimistic for the second half of the year.

In an online poll, the audience also showed a certain confidence. The participants considered consumer optimism the main deal driver to bring the economy back on track, followed by the expected restructuring cases. For the next 24 months, they expect restructuring to be dominated by divestitures and insolvencies. And the technology that could help them best complete M&A transactions? Tools that increase speed and efficiency, as well as the capability to complete due diligence virtually.

Challenges and uncertainty
Currently, the market is characterized by uncertainty. Moritz von Bodman, Managing Director of mid-cap boutique GCA Altium, observed that many are worried that they could miss the right time to buy because they expect a steep recovery analogous to the financial crisis. And for individual companies, buyers are uncertain about how things will develop in the coming months and years.

Private equity investor Sven Oleownik, Head of Germany of Gimv, sees three classes of transactions:

  • Those companies that have not been affected by the pandemic or even profit from it; these targets are being strongly courted, and prospective buyers continue to offer high prices for them.
  • For companies that were already in trouble before the pandemic, there is currently no market.
  • Most exciting from a market perspective is the large group of basically well-positioned companies that have been hit by the pandemic but whose difficulties are likely to be temporary.
    In this group there are companies that now want to divest themselves of parts of their business. Others see an opportunity to finally buy the long-awaited target, but need external capital providers for this. In the current market environment, it is crucial to provide both the buyer and the seller with sufficient security for a transaction to take place.

Flexibiilty in focus
Value assessment is the greatest operational challenge. Due diligence expert Jürgen Zapf, who heads the German business of Alvarez & Marsal, does not see completely new approaches in company auditing, but clearly shifted priorities. Above all, the operational flexibility of companies to implement both cost savings and growth scenarios has moved into focus.

In order to close a deal, buyers and sellers currently have to be much more creative to share the risks. Andreas Hoger, partner at Hengeler, observes more vendor loans and earn-out concepts. The phase between signing and closing has become riskier, and the "ordinary course of business" is difficult to define in these extraordinary times. Both sides must be ready to bite some bullets to make the deal happen.

Nevertheless, a certain optimism about M&A in DACH persists, despite the many uncertainties that the coming months may hold. The participants agreed that 2020 will be special and difficult, but not a disastrous M&A year.

 

Deal Drivers: DACH

Interested in learning more about the sectors and countries across the DACH region that are driving M&A dealmaking? Download our latest Deal Drivers report for insights into trends that will help inform your strategies in the coming months.

Get Report

Ready to Get Started?

You may also like:

Local Spotlight: Deal Drivers in SE Asia & India - Pulse of the Market

M&A deal flow has experienced a slowdown in Southeast Asia and India because of the COVID-19 crisis, and the outlook remains uncertain. Learn how dealmakers on the ground are adapting and continuing to close deals despite the current situation.

M & A Professional waiting on a Data Room
エキスパートスポットライト:日本案件モメンタム

日本のディールメーカーは、新型コロナウイルス感染拡大による当初の影響を経て、事業売却の増加や低コストでの資金調達、アクティビズムなどの要因に支えられた現在のモメンタムを背景に、M&A が力強く回復しているとみている。5 月 27 日にデータサイトとマージャーマーケットが共催したウェビナーで講演した業界専門家らが語った。

Tokyo Japan Skyline
市場の注目ポイント。世界経済の中心地であるアジア太平洋地域を支える

中国における移動制限が緩和されたことで、中国国内の経済が復活しました。中国は、世界有数の急速に発展し続ける国として、確固たる地位を再び築いたのです。新型コロナウイルスの感染拡大の初期段階に実施された、厳格な感染対策により、2020年後半には中国の消費活動は急速かつ堅調に回復し、エネルギーや天然資源に対する需要も回復しました。 中国経済が成熟していく中で、中国のエネルギー市場が今後どのように発展していくかは、中国だけでなくアジア太平洋地域全体にとっても非常に重要な課題なのです。

City Skyline
Staging - Publish 1