Marco Brockhaus, CEO of Brockhaus Capital Management AG; Dr. Tobias Sitte, Managing Partner of Alphaville Capital; Philipp Haindl, Managing Director of Serafin Group; Richard G. Ramsauer, Managing Partner of VTC Industriebeteiligungen; Alexander Schemann, Managing Directors of Amira Holding; and Dr. Hans Wehrmann, Chairman of the Board of Certina Group; together with panel head Dr. Carsten Böhm, partner of McDermott Will & Emery discussed Evergreen and M&A.
The players in the M&A niche market of Evergreens are typically family offices or groups of family offices, the latter being able to realize bigger deal sizes up to a couple of hundred million Euros in equity.
Unlike to private equity funds, Evergreen investors have more of a long-term perspective and typically only buy majority stakes. They help to grow the business by being an active shareholder. They often provide industry experts and specialists—more and more frequently from their own team—on a timely basis to, for example, fulfil 100-day plans.
Furthermore, Evergreen investors claim to have very advantageous Unique Selling Points (USPs). Not only do they rely purely on own equity and are able to make quick decisions, which grants high flexibility, but they also aren’t burdened by any investment or exit pressure and have deep industry knowledge, as well as a very strong industrial network.
With this truly entrepreneurial approach, they typically look for targets with entrepreneurs as sellers. Members of the panel discussed the some cases in which former targets become investors into the fund and/or help to find future investments.
Because of this unique approach, Evergreen investors typically buy small and mid-sized companies and concentrate on a certain region, i.e., for example DACH. However, some international add-on-acquisitions can also be observed, which can even manifest in carve outs of bigger companies.
In reaction to Brexit, the panellists expect more assets to be sold in the United Kingdom in the near future, as many companies will need to rethink their European strategy. Furthermore, according to the panel, the DACH Evergreen market is becoming more international from the investors side. This is caused by the increasing interest of foreign family offices, e.g., from India or China, which regard DACH as an economic and political “safe haven.” To avoid difficulties during the investment process, some of these foreign family offices partner with established regional family offices. Consequently, the panellists expect an expansion of international family office networks, leading to increasing funds and with this growing deal sizes.
Dr. Carsten Böhm,
McDermott Will & Emery