Recovery and increasing momentum expected in the German M&A market

We expect important future indus­tries in parti­cu­lar to bene­fit from the anti­ci­pa­ted stabi­liza­tion. These include the IT & soft­ware, health­care and rene­wa­ble energy sectors in parti­cu­lar. These sectors alre­ady recor­ded a large number of exci­ting tran­sac­tions last year, with incre­asing inter­na­tio­nal parti­ci­pa­tion, as pros­pec­tive buyers are incre­asingly coming from abroad. 

Last year, for exam­ple, our team supported the sale of medi­cal tech­no­logy specia­list meetB to the inter­na­tio­nal Asker Health­care Group and the aggre­gate manu­fac­tu­rer ATEMAG to the Swedish company Röko AB. The number of such cross-border tran­sac­tions in the small and mid-cap market will conti­nue to increase in the coming months. Many German SMEs are in an excel­lent posi­tion despite the mixed econo­mic situa­tion. This is also being reco­gni­zed by more and more foreign compa­nies that want to close gaps in their port­fo­lios or gain access to the large German market with an acqui­si­tion. The trans­for­ma­tion of the economy and the energy tran­si­tion in parti­cu­lar are also driving deal acti­vity. The trans­for­ma­tion of the economy requi­res enorm­ous invest­ments in many areas. For many compa­nies, it makes sense to make these invest­ments in conjunc­tion with a larger group or with the help of a finan­ci­ally strong inves­tor. The trans­for­ma­tion ther­e­fore remains a key driver. 

In addi­tion to the long-awai­ted poli­ti­cal clarity, falling infla­tion rates and a more stable inte­rest rate envi­ron­ment could also have a posi­tive impact on M&A acti­vity. Tran­sac­tion volu­mes, parti­cu­larly in the weak­e­ning mid-market segment, are likely to bene­fit from this, even if the big deals have yet to materialize. 

Howe­ver, accor­ding to Seip, this is also likely to change soon, at least in some sectors. The conti­nuing high level of invest­ment in AI and digi­ta­liza­tion, as well as in the expan­sion of hydro­gen tech­no­logy and green infra­struc­ture, gives hope for a lot of momen­tum in the tech­no­logy and rene­wa­ble energy sectors. Howe­ver, provi­ders of B2B services and compa­nies with parti­cu­larly inno­va­tive busi­ness models are also achie­ving high valua­tions and are moving to the top of the tran­sac­tion agenda. 

Above all, it is important to be able to plan well — espe­ci­ally against the back­drop of incre­asingly long M&A proces­ses. The exami­na­tion of ESG crite­ria is also taking up more and more space in due dili­gence proces­ses. Good prepa­ra­tion is important here. Entre­pre­neurs should ther­e­fore take a stra­te­gic approach to M&A at an early stage. 

Poten­tial losers include tradi­tio­nal retail­ers, prin­ters, print media and finan­cial service provi­ders without digi­tal busi­ness. Howe­ver, energy-inten­sive indus­tries such as chemi­cals, steel and cement as well as auto­mo­tive suppli­ers and the cons­truc­tion and real estate sectors must also expect losses due to high energy costs, falling demand and incre­asing regu­la­tory pressure. 

About Syntra Corpo­rate Finance 

Syntra Corpo­rate Finance is part of the part­ner-led Syntra Group, which also includes the M&A boutique Nach­fol­ge­kon­tor, which specia­li­zes in succes­sion plan­ning for smal­ler, predo­mi­nantly owner-mana­ged compa­nies. Syntra Group regu­larly achie­ves top posi­ti­ons in reco­gni­zed M&A league tables. In 2024 alone, the group advi­sed on almost 40 tran­sac­tions, putting it in first place among M&A advi­sors in Germany accor­ding to the latest Merger­mar­ket ranking. More infor­ma­tion under: www.syntracf.com