Dr. Florian von Alten, Managing Partner of Oaklins Germany, Dr. Michael Drill, CEO and Managing Director of Lincoln International AG, Carsten Hagenbucher, Managing Director for corporate investment in Europe of Investcorp, Philipp von Mitzlaff, Business Development Director of Paragon Partners GmbH and Brendan P. O’Connor, Assistant General Counsel for Mergers & Acquisitions and Assistant Secretary of Honeywell International Inc., together with panel head Dr. Nikolaus von Jacobs of McDermott Will & Emery discussed the M&A and Private Equity market in 2017.
The panel dove into the current market, highlighting the positive atmosphere as an increasing number of investors chase the limited number of deals available. This competition among investors has continued to drive up prices, as a multitude of new players, funds and offices hope to make their mark on the M&A markets. In past years, there were perhaps concerns regarding how these new groups would conduct themselves in the market, but time has shown these fears to be for naught.
As was the case in 2016, monetary policy and financing banks have continued to drive up the purchase price level, as readily available financing options have made the entry of potential investors into the market place and the acquisition of capital for deals easier. The advent of the Trump Administration has provided a boost to the markets, with the clear—although undetailed— business-friendly position of the administration increasing investor confidence. This could easily change depending on developments in Washington but thus far, US firms continue to be optimistic. With the ever-growing competitive landscape, the question stands where investors look to find the right assets in order to add value. The German Mittelstand remains attractive, with the relative stability of the region also serving to draw investors. Continuing on the developments of last year the panelists have found that the structure of auction processes have continued to change. While the market has been crowded, investors have not forgotten the lessons of the years following the financial crises, and greater care is now being taken in both selecting a potential target and in carrying out the due diligence process. While investors continue to look for opportunities, this has prompted them to abstain from undue risks.