German Private Equity & Venture Capital Breakfast Report: the market is down in 2023, but some interesting M&A deals are going through

June 21, 2023 – Pedersen & Partners in association with CMS Germany hosted the eighth German Private Equity & Venture Capital Breakfast in Munich. The event provided a dynamic and agile atmosphere for representatives of well-known German and international private equity funds to discuss, debate, and network.

The Private Equity & Venture Capital Breakfast gathered attendees from private equity, venture capital, credit funds, portfolio firms and other professionals. The panel discussion was co-chaired by Tobias Schneider (Partner, CMS) and Poul Pedersen (Executive Chairman, Pedersen & Partners). The panel consisted of: Christopher Apfel (Vice President, General Atlantic); Oliver Diehl (Managing Director, Jefferies); Hans Haderer (Partner, Ambienta); Matthias Kreye (Managing Director, Deutsche Invest Mittelstand); Itziar Estevez Latasa (Partner, IRIS); Johannes Laumann (Chief Investment Officer, Mutares); Philipp Schult (Director, AlixPartners) and Jens Westernhagen (Partner, Armira).

The main takeaways from the lively panel discussion:

  • The average M&A deal value has decreased significantly in Germany in 2023, due to falls in both volume and valuation. Defensive sectors such as healthcare are holding up, but there are declines in growth sectors such as technology. However, interesting M&A deals are still being completed even in this down market, such as Carrier’s 13 billion EUR acquisition of Viessmann.
  • Portfolio firms need to focus on the core business and cash generating activities. It is critical to combine the right executive leadership team with clear shareholder communication.
  • Funds that are focused on distressed firms are seeing increased deal flow.
  • Leverage is available, but more expensive than previously, and not necessarily obtained from banks.
  • Although the market is down in 2023, there is a silver lining with a recent uptick in IPO processes and M&A activity. There is hope for a better market ahead, but funds are planning for different scenarios, including a further deterioration.

We extend our sincerest gratitude to the panellists, co-chairs, and our event partners at CMS Germany for their invaluable contributions in ensuring the ongoing success of the eighth German Private Equity & Venture Capital Breakfast event.