Industry + Engineering
More than almost any other country, Germany’s economy stands for a strong industry, which is characterised in particular by medium-sized, often family-run companies. These are often so-called “hidden champions”, i.e. world market leaders in their market niche.
Recent Developments and Trends
Of outstanding importance for Germany as an industrial location are above all the automotive industry and mechanical and plant engineering. Vehicles, vehicle parts and machines “Made in Germany” stand for quality internationally and are Germany’s most important export goods. In 2021, the two sectors generated a cumulative turnover of more than EUR 630 billion with about 1.8 million employees.1
Probably the most important and urgent issue for German industry at present is the shift towards climate-neutral production, which is closely intertwined with increasing digitalisation of the entire value creation and production process. Key words in this context include smart factory, Industry 4.0, autonomous driving and software-based services.
Investors
In addition to strategic and traditional private equity investors, industrial holding companies and family offices are increasingly appearing on the market as buyers. The investment strategy of the latter two investor groups, which is usually geared towards long-term commitments, often coincides with a cross-generational entrepreneurial vision of the often medium-sized and owner-managed companies. Particularly attractive are industrial companies that occupy a leading position in their market niche due to high innovative strength and high-quality products and are therefore able to generate stable cash flows.
Evaluation
After an interim recovery in 2021 and corresponding catch-up effects, the uncertainties in the wake of the outbreak of the Ukraine war are making themselves felt in the form of lower M&A activity and, consequently, lower company valuations.
1Bundesministerium für Wirtschaft und Klimaschutz: https://www.bmwk.de/Redaktion/DE/Textsammlungen/Branchenfokus/Industrie/branchenfokus-automobilindustrie.html, abgerufen am: 09.01.2023
Verband Deutscher Maschinen- und Anlagenbau: https://www.vdma.org/documents/34570/6128644/MaschinenbauinZahlundBild202022.pdf/, abgerufen am: 09.01.2023
In the industry + engineering sector we have the references Groz Beckert, JWO, Regeniter, Schüco, GNS, Intersnack
