Despite of hopes in the beginning of May after the termination of the shutdown in Germany, we experience actually a second wave, which negatively influences part of our economy.
Fortunately the German politics has learned, so that vast shutdowns similar to March are seldom. Most affected are only the tourism, restaurants and events.
In most of the other parts the economic boom continues, even though with lower growth rates than in the last quarter.
Only when there are nationwide and international available vaccinations with a good protection, which we expect not before next year, the world economy will recover completely.
For Germany experts predict, that our BIP could reach the level of 2019 at the end of 2021. In most other countries this should be reached latest in 2022/23.
What does that mean for the German M&A market?
We think the M&A market will cut in half in 2020.
Companies, which are mostly affected from the pandemic, will postpone their planned sale into the coming years. Only if the buyers are ready to do not take into account the temporarily sales and profit effects of the pandemic, there will be deals in that fields.
Our actually experience is that primarily financial investors (PE’s, family offices) came back to the market and try to do postponed deals.
For most of them the actual situation offers a unique chance to acquire even companies, which normally would not have been for sale or which strategic buyers would have bought.
Our own business developed surprisingly well since May and we closed several deals to very good conditions.
We brought back several postponed deals and are optimistic to finalize most of them in the next six months.
So should you plan to sell your company, please give us a call. We will tell you in a first meeting (cost free), if your company is saleable, what could be the purchase price range and if it is now or later the best time to start a selling process.
Yours Xaver Zimmerer, Managing Partner, late October 2020