The long-awaited succession wave among small and medium-sized companies (SMEs) in Germany may finally be here. According to the private equity company Deutsche Beteiligungs AG (DBAG), in 2018, family-owned businesses in Germany’s Mittelstand made up about 40 percent of those selling companies to financial investors – a new record level and part of a trend from the last three years. Before that, just one in ten transactions involved a family-run business.
In raw figures, the 47 management buyout (MBO) transactions represented 12 more than in the prior year, setting another new record since 2002, when DBAG first began tracking such transactions of between EUR 50 million and EUR 250 million. In monetary figures, the buyouts were together worth a record EUR 4.8 billion. According to experts cited by the German business daily Handelsblatt, these record investments are due to several factors, including: company owners’ declining “dynastic motives” and growing openness to financial investors, on the one hand, and the currently high level of valuations, on the other.