Deal Report 20151

DEAL REPORT 2015

SMEs The most important pillar of the M&A market in 2015

A STRONG YEARNumber of transactions and volume of deals remain high

OUTLOOK FOR 2016The basic parameters of the M&A market point to brisk transaction activity

THIS WAS OUR YEAR

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Dear Reader,

When we in Europe look back upon the year 2015 at some future date, it will be the terror attacks and the waves of refugees that first come to mind. As a globally oriented and positioned company, we at Angermann M&A International have been observing these developments with sympathy and concern.

From an economic standpoint, however, 2015 has left us with much to report that is positive. The M&A market has continued on from the previous year at a high level of activity. Owing to the unparalleled achievements of our team over the last twelve months, we at Angermann can boast not only the largest transaction, the highest number of closed deals and the best annual result of all time.

With M&A International Inc. we also advanced worldwide to a top position in the international ranking of mid-market advisors (from number 13 in the previous year to 6th place). Cross-border activities have been especially crucial in stimulating the market for M&A transactions in recent years. In

more than half of all M&A transactions in Germany, one of the contracting parties was a foreign party. In the future, further growth will continue to be achievable only with open borders and larger interconnected markets.

With that in mind, let us hope that rational tendencies may prevail in the world’s crisis areas and bring further stability to the M&A environment. M&A year 2016 will then carry on from the successful achievements of the last two years.

Yours sincerely,

Dr. Hans B. BethgeExecutive Board Member Angermann M&A International AG

“Growth will continue to be achievable in the future only with open borders and larger interconnected markets.”

CONTENTS

FOREWORD The best annual result of all time

MARKET ANALYSES 1,507 acquisitions marked strong M&A year

DEALS Our transactions in 2015

ANGERMANN NEWS We have TRANSFORMED our legal structure into that of a German Stock Corporation (an “AG”)

We have MOVED to Frankfurt am Main

LECTURE “Minority interests in family-run companies”

INTERNATIONAL CONFERENCES: San Francisco and Amsterdam

SPONSORING: Symposium on Restructuring at the University of Kufstein

OUTLOOK FOR 2016 Where will the journey be taking us in 2016?

FORWORD

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MARKET ANALYSIS

2015 A strong year for M&A

Coming on the heels of boom year 2014, 2015 brought another strong year. The market for corporate transactions involving German companies, as buyers, sellers, or both, continued to experience a high level of activity in 2015. A key measure of activity in this market was the number of registered transactions. The 1,507 acquisitions that occurred marked the second-highest figure since 2002. The current figure is one fifth (20.3%) higher than the average of 1,253 transactions recorded for the previous ten years. This puts 2015 squarely within the success range, even though it saw a significant 7.7% decline from the 1,633 acquisitions of the previous year, the highest figure recorded since 2002.

The transaction volume – the sum of all contractually agreed corporate values – also made a strong showing in 2015. Its total value of EUR 189 billion is the second-highest since 2000, surpassed only in 2014 (EUR 237 billion). The current figure stands higher by a third than the average for the previous 10 years, EUR 142 billion. These basic data are not the only impressive results. Also gratifying was the fact that the bulk of the major transactions announced in 2014 were closed in 2015. A total of 21 billion-euro deals were completed in

2015, six of them mega-deals with a volume greater than EUR 5 billion. The volume of the top 10 completed transactions amounted to EUR 64.1 billion, the highest figure seen in many years. Only four of them were both agreed and completed in 2015, however. This shows that completing the transactions took considerably longer than it used to. 2014 and 2015 have made it strikingly clear that German companies are increasingly emboldened to pursue even very large acquisitions and are systematically seeing them through. The top three among the completed transactions were successful public acquisitions by German companies.

Family-owned companies and SMEs

All in all, fewer very large acquisitions were announced in 2015 than in 2014. The mainstay of the German M&A market in 2015 was the SMEs with their family-owned businesses and “hidden champions”. A few large transactions were completed even in this segment, but an especially large number of those completed were small or medium-sized. A high level of activity was observed not only in acquisitions, both at home and abroad, but also in sales, which were motivated by succession plans or, in some cases, market

consolidations. One interesting development in the German M&A market was the increasing importance of acquisitions of and by start-up companies. The “new SME” segment, also referred to by the keywords “venture capital” or “new economy”, has taken root in Germany, and in 2015 it brought many interesting transactions to fruition. Well-known international venture capital funds are increasingly investing in start-ups, many of which are already generating millions in sales revenue and expanding through acquisitions. But more and more sales (“exits”) are also taking place as start-ups become attractive companies.

Another development in the German market is the positive trend in genuine mergers in which the shareholders in both companies remain invested in the resulting larger company (examples include JAB/Master Blenders + Mondolez’s coffee unit, Springer Science + Holtzbrinck’s education division, Dorma + Kaba and Immowelt + Immonet). Typically either no purchase price changed hands or dividends were equalized. A few takeover attempts of a “hostile” nature – because they were rejected by management – became a source of excitement in 2015. While no offer was ever made to the shareholders

in Potash and Kali + Salz and no deal between them was announced, it should be known by the end of January whether Vonovia (formerly Deutsche Annington) is successful with its combined cash and exchange offer to acquire Deutsche Wohnen.

Private equity

The private equity sector also was very active this year. Though the 360 transactions in 2015 were fewer in number than those in 2014 (394), they were in considerably greater quantity than those realized in earlier years (307 in 2013, 264 in 2012). Transactions involving financial investors accounted for 23.9% of all transactions involving German companies, a percentage that remained nearly constant (2014: 24.1%). Many sales were transacted as “trade sales” to companies or other private equity investors.

Countries

Cross-border transactions continue to account for a large share – 56.8% – of the total number of deals involving German companies (previous year: 57.2%). The increasingly international nature of these transactions becomes evident when this figure is compared to the mean value of 54.5% for the

previous ten years. The number of cross-border transactions stood at 856, the second-highest such figure since 2001. In line with goods and services, more German companies are being sold abroad than foreign companies are being acquired by German companies. In 2015, 477 German companies were bought by foreign companies (31.8%); in 377 transactions a company was acquired abroad by a German company (25%). Purely domestic acquisitions numbering 651 in total accounted for 43.2% of all transactions in 2015.

Industries

The industrial goods and machinery industry topped the 2015 industry ranking with 236 transactions (a 15.7% share), ahead of the information technology (198 transactions, or 13.1%) and service (163 transactions, or 10.8%) industries. Following in fourth place was the consumer goods and retail sector (135 transactions), ahead of the pharmaceutical and health care sector (121 transactions).

Company valuations

The strong M&A year was fueled by a continued high level of liquidity in the market among companies and private equity funds and by conditions

for acquisition financing that continued to be excellent. Valuation levels for attractively positioned, growing companies reached peaks that surpassed the very high pre-crisis levels of 2007-2008. In the case of mega-deals and other large transactions in particular, up to considerably more than ten times the operating result (EBITDA - earnings before interest, taxes, depreciation, and amortization) was paid.

Sellers in the middle-market segment also profited from the high valuation levels. There, too, attractive valuations of up to double-digit EBITDA multiples were ascribed to growing companies with excellent profitability.

You will find detailed information in the soon-to-be-published “Angermann M&A Monitor”.

Number of transactions and volume of deals remained high

MARKET ANALYSIS

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DEALS

Our transactions in 2015

The success of the M&A year was also in evidence at Angermann. For 21* completed transactions, 14 of which cross-border, we acted as a reliable partner and advisor.

DEALS

WIV Wein International AG sells Naked Wines International Ltd.

Naked Wines International Limited (“NW”), based in Norwich, Great Britain and one of the world’s largest and fastest-growing online wine producers and distributors, has been sold to the British listed wine merchant Majestic Wine PLC. The majority shareholder in NW making the sale was the German company WIV Wein International AG, one of Europe’s leading wine merchants. In 2009, WIV Wein International had acquired a majority stake in what was then a start-up, thereby laying the foundation for its successful development over the last several years. Today the company occupies a leading position particularly in Great Britain, and it has been experiencing marked growth in the American and Australian markets as well.

M&A International, Inc. and its teams in Germany and England advised England Naked Wines International Ltd. and its shareholders during this transaction.

Equity increase at Wellemöbel GmbH

The Wellemöbel group has successfully concluded, under self-administration, the insolvency proceedings that were instituted in late November 2014. Financing for the restructuring plan had been secured with new equity by late April. The prominent manufacturer of free-standing cabinets will be investing EUR 3 million to replace and modernize machinery. The management has also reached agreement with the works council and union on a socially-acceptable job cutting plan encompassing 260 positions and closure of the Detmold location. Roughly 600 jobs have been preserved.

As its exclusive strategic financial advisor during the proceedings, Angermann M&A International AG helped Wellemöbel raise additional equity funding with a capital increase.

(*published here: 20 transactions)

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DEALS

New York financial investor acquires E.M.P. Merchandising Handelsgesellschaft mbH

E.M.P. Merchandising Handelsgesellschaft mbH, Lingen, Europe’s leading e-commerce company in the field of rock music- and entertainment-inspired clothing and accessories, has been acquired by Sycamore Partners, a financial investor in New York that specializes in investing in successful and growing consumer and retail companies.

Sycamore is also majority shareholder in the American market leader Hot Topic, which operates more than 650 retail shops in the U.S. and Canada and counts among the key retail partners for licensed products of the music and entertainment industry in North America.

Angermann M&A International AG functioned as the seller’s exclusive advisor and structured the entire M&A process in the fewer than four months from initial market contacts to signing.

Royal Dirkzwager B.V. sells amaretto and herbal liqueur brands to private investor

The Dutch company Royal Dirkzwager B.V. has sold a selection of alcohol brands to a private investor. The selected brands included the amaretto brand Romanza along with the herbal liqueur brand Zinnaer Klosterbruder.

Royal Dirkzwager is a family-run business and a leading independent producer and provider of wines and spirits in the Netherlands. Royal Dirkzwager owns a large number of familiar brands, among which are Floryn, Legner, Weduwe Joustra, Van Gogh and Tarpan The company is also owner of the Mitra chain, which operates more than 200 alcoholic specialty shops in the Netherlands.

Angermann M&A International AG and Holland Corporate Finance jointly advised the seller during the transaction.

“E.M.P. has developed a loyal customer base over a period of many years. We are pleased to be able to build upon this heritage.” Peter Morrow, Managing

Director of Sycamore Partners

Nordbrand Nordhausen GmbH acquires selected liquor brands

Nordbrand Nordhausen GmbH acquired the Fläminger Jagd, Asmussen Rum, Balle Rum, Boddel Rum and Jagdhütte brands on August 13, 2015 from Drinks & Food Vertriebs-GmbH. With this expansion of its portfolio, one of the most important German producers of spirits has extended its reach in the market for herbal liqueurs while simultaneously entering the interesting rum segment with some attractive brands.

Nordbrand Nordhausen GmbH has preserved and cultivated for more than 65 years the great art of distilling spirits from grain and blending various alcoholic specialties. Some 108 employees currently work for Nordbrand Nordhausen.

Angermann advised Koninklijke Distilleerderij M. Dirkzwager B.V. during the transaction jointly with the Dutch firm of Team Holland Corporate Finance B. V..

DEALS

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DEALS

AssFiNET Group and Acturis Group Ltd.: a strategic partnership

Angermann M&A International AG successfully advised shareholders in the AssFiNET Group, the leading provider of software for insurance brokers in Germany, on their cross-shareholding and the formation of a strategic partnership with the British Acturis Group Ltd.

With a market share of more than 25 percent, AssFiNET is the leading provider of software for insurance brokers in Germany. AssFiNET solutions offer support for the entire process of insurance brokerage, including digital networking with insurers and rate comparison systems. Acturis had already acquired in 2014 the leading provider of automotive rate comparisons in the German brokerage market, NAFI GmbH.

Angermann M&A International AG advised the shareholders in the AssFiNET Group on an exclusive basis during their search for a strategic partner. The transaction was successfully completed in fewer than four months.

Fiducia & GAD IT AG and the CREALOGIX Group form a long-term alliance

Pursuant to its cooperation agreement with Fiducia & GAD IT AG, the CREALOGIX Group, a leading Swiss provider of digital banking solutions, has also acquired a major interest in the Fiducia & GAD subsidiary ELAXY, a leading German fintech provider of interactive consulting solutions for banks and financial service providers.

An 80% interest in ELAXY Financial Software & Solutions was acquired, along with a 20% interest in ELAXY Business Solution & Services, by means of an initial investment. Fiducia & GAD IT AG is the information technology provider for the Genossenschaftliche Finanzgruppe. The company currently employs roughly 5,500 employees who together generate EUR 1.26 billion in annual consolidated sales.

Angermann M&A International AG advised Fiducia & GAD IT AG on an exclusive basis during this transaction.

Consileon acquires the software company ELAXY Format from Fiducia & GAD IT AG

Consileon, a group of medium-sized business and IT consulting firms, is acquiring ELAXY Format from Fiducia & GAD IT AG, the IT provider to the Raiffeisen banks and credit unions. The acquisition agreement was signed on December 23, 2015 by the parent company Consileon Business Consultancy GmbH, its subsidiary ajco solutions GmbH and Fiducia & GAD IT AG.

ELAXY Format and ajco have worked closely together for many years. With its financial commitment, the Consileon Group is ensuring that the software will continue to be maintained and further developed. This acquisition is a continuation of the Consileon Group’s long-standing growth trajectory. Angermann M&A International AG advised Fiducia & GAD IT AG on an exclusive basis during this transaction.

American Moss Inc. acquires Marx Moschner GmbH

Marx & Moschner GmbH, a leading provider of large-scale digital branding solutions, is bundling its business activities with the largest American provider, Moss Inc., effective immediately. The previously owner-run company is considered one of the most reputable German providers in this field. By merging, Marx & Moschner and Moss have become the world leader among providers in the industry. The two organizations are increasing both their expertise and their productivity as they expand their geographical presence. Following the acquisition, former managing partner Maik Raute will be managing European operations for Moss.

As exclusive financial advisor to Moss Inc., USA, Angermann M&A International AG initiated the transaction and assisted throughout the acquisition process, and it assisted Century Park Capital Partners during the initiation and due diligence phases as well as during the negotiations.

DEALS

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DEALS

Seitz GmbH is sold through a management buy-in and with the support of an outside investor

Seitz Heimtiernahrung of Langwedel near Bremen, a leading producer of premium dog and cat food for customer brands, has been sold in a management buy-in to future

managing partners Thomas Suwelack and Michael Strumpen with the support of BPE, a Hamburg SME investor specializing in succession arrangements.

Founded in 1981, Seitz Heimtiernahrung specializes in producing canned wet dog and cat food for customer brands. Its line of products also includes raw feeding products and sausages, also marketed under the “Seitz Heimtiernahrung” brand. The more than 300 product variations are processed, sealed in airtight cans, sterilized, labeled and packaged. Its customers include in particular German premium brand companies that sell their products directly through veterinarians or retailers.

The partners in Seitz Heimtiernahrung received financial advice from Angermann M&A International AG and legal advice from the Hamburg law firm of Schmidt-Jortzig Petersen Penzlin.

AIAC Group acquires Metallwarenfabrik Gemmingen GmbH

Metallwarenfabrik Gemmingen GmbH is a mass producer of sophisticated die-cast aluminum parts and high-precision electrical steel or lamination stacks. It also manufactures power generation systems and distributes them worldwide under the brand names GEKO and EISEMANN. The AIAC Group acquired Metallwarenfabrik Gemmingen GmbH in the summer of 2015. The AIAC Group is an American industrial holding company that specializes in special situations. The buyer’s international focus and size are an abundant source of different business and development possibilities for the company and its employees.

Angermann M&A International AG assisted in the complete sale by taking charge of data room management for the shareholders and management of Metallwarenfabrik Gemmingen GmbH.

“We believe we have found two industrially experienced managers and an experienced investor who can lead the company in its next stage of develop-ment.” Holger Seitz, Seitz GmbH

Hilzinger Group acquires Anders Metallbau GmbH

Founded in 1933, the family-run company Anders Metallbau is, with its 120 employees, one of the largest metalworking companies in Germany. In 2014 the company began to experience financial distress, despite a healthy order volume, that forced it into insolvency proceedings, for which an application was filed on October 20, 2014. At the same time, Angermann M&A International AG managed an M&A process in the course of which

more than 100 domestic and foreign strategists were consulted.

In the end, the Hilzinger Group prevailed as the most suitable bidder by virtue of its ownership structure and corporate culture. There are, in addition, numerous synergies that can be exploited by both the buyer and the company itself, and all 120 employees are being retained.

DEALS

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DEALS

MMOGA, the leading European online intermediation platform for digital license codes and virtual goods, is acquired by a Chinese exchange-listed group

Kee Ever Bright Decorative Technology Co Ltd (002464:SHE) (“KEE”), a company based in Kunshan, China and listed on the Shenzhen, China stock exchange, has acquired a 100% stake in Hong Kong-based MMOGA, Ltd. (“MMOGA”). At the end of a worldwide bidding process, the seller decided in favor of KEE, which would like to use MMOGA as a platform on which to build an internationally operating e-commerce group.

Established in 2008, MMOGA specializes in providing digital license codes and virtual goods. Its range of products comprises, in particular, game keys, game cards, and prepaid cards

such as, for example, iTunes gift cards. Also offered are in-game items and virtual currency for various game titles. MMOGA’s customers especially appreciate the flexibility of digital distribution, the many payment options offered and the extensive range of products. With nearly 4.5 million users and several hundred thousand transactions per month, MMOGA counts among the most successful and farthest-reaching platforms in Europe.

Angermann M&A International AG assisted MMOGA, Ltd. with the transaction as its exclusive M&A consultant and advised it in connection with the sale of its company.

Chinese Powerway Group Co., Ltd acquires Berkenhoff GmbH

The Chinese company Powerway Group Co., Ltd., one of the world’s leading producers of non-ferrous semi-finished products and wires, has acquired 100% of shares in precision wire manufacturer Berkenhoff GmbH. The sellers, representatives of nexpert AG, signed the contracts with Powerway in early August.

Its acquisition of Berkenhoff gives Powerway an excellent opportunity to strengthen its own market position in Europe and to further expand its international presence. Berkenhoff enjoys with its umbrella brand a high level of brand awareness and customer appreciation. The Chinese buyer also hopes to realize synergies in the field of precision wire manufacturing. Powerway provides Berkenhoff with the financial stability it needs and a sustainable strategy for the future.

Headquartered in the Hessian town of Heuchelheim, Berkenhoff produces high-tech precision wires for spark erosion, welding and brazing, electronic components, and special applications.

Ningbo-based Powerway has roughly 5,000 employees and distributes mainly semi-finished products made of non-ferrous alloys to prominent customers all over the world.

Angermann M&A International AG provided Powerway Group Co., Ltd. with advice for its expansion plans in Europe pursuant to a purchase-related consulting agreement.

DEALS

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DEALS

Dutch company Culterra Holland B. V. acquires German company Maltaflor International GmbH

Maltaflor International GmbH, which is based in Germany, produces plant-derived fertilizer from malt sprouts for the fruit-growing and garden market. Formed in 1994, the company exports its high-quality products to Italy, Austria, Switzerland and Sweden.

Culterra Holland B. V. is the market leader in the production of high-grade organic fertilizer in the Netherlands. Culterra offers a broad range of organic fertilizers and soil improvement granules for the wholesale and retail markets.

M&A International Inc. served during the transaction as the buyer’s exclusive M&A consultant.

Mutares AG sells Irish pharmaceutical company to Slovak company Saneca Pharmaceuticals, a.s

The target company, Suir Pharma Ireland, is an independent contract company for the production of pharmaceutical products. The company operates two plants that specialize in traditional oral solid dosage forms and beta-lactam oral solids. The buyer, Saneca Pharmaceuticals, a.s., develops, registers, and distributes generic drugs, active pharmaceutical ingredients and cosmetic products. The seller, the German company mutares AG, is an investment company that specializes in acquiring companies in situations of radical change such as ownership changes or succession planning, strategic repositioning, refinancing, etc.

M&A International Inc. provided assistance during the transaction and advised the buyer.

DEALS

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DEALS

expertum group and Sempart GmbH merge

The expertum group and Sempart GmbH merged in May 2015. Markus Winkler, formerly the sole shareholder in Sempart GmbH, contributed his shares to the group and acquired an interest in the expertum group. Angermann advised the Sempart GmbH shareholder during the transaction, identified the buyer and helped structure the transaction.

The purpose of the merger is to consolidate the group’s nationwide network of branches in Germany and thereby increase its market share of the German personnel services industry. With Sempart, the expertum group now has more than 41 locations in the German market and is adding to its strength with acquisitions in the Rhine/Main and Rhine/Neckar areas in particular. Sempart is a provider of personnel services particularly in the banking, finance, industrial, IT and office markets, where it has operated successfully since 1992. Sempart concentrates primarily on qualified skilled workers and is a reliable source of professional candidates for open positions.

Saubermacher Dienstleistungs AG from Austria acquires a majority stake in the German Redux Group

The Austrian company Saubermacher Dienstleistungs AG has acquired a 55% stake in the German Redux Group for a purchase price of USD 20 million. The Redux Group, which consists of two operating units, Redux Technologie GmbH and Redux Recycling GmbH, was formed in 1997 and is the European market leader in the field of processing and recycling batteries.

Based in Austria, Saubermacher Dienstleistungs AG is a waste disposal company and creates individually customized waste disposal solutions for private industry, communities and households. “This acquisition is a part of the company’s realignment process, in the course of which we will be pursuing further investments in the field of high-tech recycling,” said Dagmar Heiden-Gasteiner, CFO of Saubermacher Dienstleistungs AG. M&A International Inc. assisted in the transaction as financial advisor to Saubermacher Dienstleistungs AG.

Rhenus SE & Co. KG acquires a majority interest in the Swiss company Crossrail AG

The shareholders in Crossrail AG have sold a controlling interest in their company to the German company Rhenus SE & Co. KG. Crossrail operates in the rail traction unit segment and controls block trains on a large number of European connecting lines, especially on the Benelux-Italy and Benelux-Germany lines. It is one of the few companies in Europe that operate independently of state-owned rail service companies.

With USD 4 billion in revenue, the Rhenus Group counts among the leading European logistics service companies. Rhenus is represented at 350 locations and has a workforce of 24,000 employees. The company’s headquarters, its management team and its firm name remain unchanged. M&A International Inc. advised the executive board of Crossrail AG in regard to the selection of potential buyers, the due diligence process and the structuring of the transaction.

The PCI Group’s shareholders sell their company to the American company Verisk Analytics Inc.

The PCI Group is an amalgamation of five companies (among which is the German company PCI Research GmbH, which operates in the nylon, fiber and technical plastics segments) that together provide integrated data and information for chemical research in the plastics and fibers industry.

Verisk Analytics is the leading provider of information on risks. The company offers risk assessment services along with decision analyses for companies in a large number of areas, including indemnity and accident insurance, financial services, health care, energy and human resources. Verisk Analytics has its company headquarters in Jersey City, New Jersey, and branches elsewhere in the United States and throughout the world. M&A International Inc. advised the seller during the transaction.

DEALS

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INSIDE ANGERMANN

“Minority interests in family-run companies” lecture in Stuttgart

Family-run businesses are coming more sharply into focus. They are a strong element of the German SME sector and are often shaped by formidable business- and family-related challenges. With histories that stretch back over multiple generations, a great many SMEs give evidence of a disjointed company structure. Many minority shareholders have little to no influence on day-to-day business operations, but they could play an important role in important strategic decisions.

In the wake of the financial crisis, financial investors and banks have been subjected in recent years to strong investment pressure, which has resulted in growing interest in minority holdings. Family-run companies in particular are generally interested in minority investments by outside, professional investors, both because such investments do not deprive them of control over their companies and because the presence of institutional investors tends to professionalize processes and structures. An increasing number of transactions for minority investments in SMEs has been recorded in the M&A market in recent years.

64th M&A International Inc. Spring Conference 2015 from June 11 – 13, 2015 in San Francisco

Silicon Valley was in the spotlight at the MAI spring meeting in San Francisco. More than 130 participants met from June 11 to 13, 2015 at the spring conference organized by M&A International Inc. (MAI) in San Francisco. An important part of the conference was an event devoted to the topic “How the technology of Silicon Valley influences our world”. Some of the most interesting minds in the IT and high-tech metropolis were invited to contribute.

Inducted as new members of the largest organization of independent M&A consulting firms were Apoys Consultoria from Peru and TJP Advisory & Management Services GmbH from Austria. As a result, MAI is currently represented by 48 partner companies in 43 countries.

Angermann M&A International AG sponsored the “4th International Symposium on Restructuring" at the University of Kufstein

The purpose of the symposium was to introduce and discuss new developments in the industry and to encourage cross-border dialog among entrepreneurs, managers, bank representatives, insolvency administrators, investors and representatives of the consulting professions as part of a special conference experience at the gateway to the Kitzbühel Alps. The distinguished speakers reported on the main topic, “No turnaround without a strategy”. Apart from current topics relating to insolvency law, the event’s main emphasis was the changes that are occurring in business models.

WE HAVE CHANGED OUR NAME...

The development of our company continues apace. We have grown in recent years not only in terms of

personnel, but also geographically: from Hamburg to Stuttgart and on to Frankfurt. But that is not to

be the end of it. To ensure that we are legally positioned for the long term on the best possible basis,

we have decided to transform our legal structure into that of a German Stock Corporation (an “AG”).

65th M&A International Inc. Fall Conference 2015 from November 12 to 14, 2015 in Amsterdam

M&A International’s Fall Conference took place in Amsterdam from November 12 to 14. With more than 300 internal and outside attendees, this was one of the most successful members’ conferences in the 30-year history of our organization.

More than 200 M&A professionals from all corners of the globe gathered for three days of discussion of the most recent developments in a positive market environment and to intensify cooperation among the 48 teams from the world's most important financial centers. In the last five years alone, more than 1,400 transactions have been completed with a cumulative value of more than USD 75 billion.

The 15th Mid-Market Forum (MMF) was organized at the same time, attracting approximately 100 clients from 17 countries. This event offered, in a special format, an opportunity for more than 500 one-on-one discussions about pre-defined fields of acquisition between representatives of industry and consultants.

An interesting cultural program that accompanied the proceedings contributed to the great success of the conference and stimulated heightened interest in the coming event in Dubai scheduled for early March 2016.

... AND WE HAVE MOVED

Our company name is not all that has changed. Our address in Frankfurt has changed as well. On Octo-

ber 5 we moved from Kronberg to Frankfurt’s Westend district and into the Solo West building at Guiol-

lettstrasse 48, 60325 Frankfurt, where we can be reached by phone at 069/505029153. We marked

the occasion by throwing a housewarming party, where we shared food, drink and entertainment with

more than 100 invited guests.

Events

The lecture event was aimed at both majority and minority shareholders who have been looking for options in their dealings with fellow shareholders.

INSIDE ANGERMANN

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CONTACTS

Dr. Florian von AltenExecutive [email protected]+49 40 34914-168

Dr. Lutz BeckerExecutive [email protected]+49 40 34914-162

Dr. Hans B. BethgeExecutive [email protected]+49 40 34914-160

Dr. Michael ThieleExecutive [email protected]+49 711 224515-12

Dr. Axel GollnickExecutive [email protected]+49 69 5050291-50

Ali TaşbaşıExecutive [email protected]+49 69 5050291-51

Jan P. HatjeExecutive [email protected]+49 40 34914-175

Where will the journey be taking us in the M&A market in 2016? The first few weeks of the year have left a disquieting impression of the state of the world economy. The stock markets, to whose movements people tend to ascribe the role of an indicator, fell by a double-digit percentage in the first few weeks of the new year.

But what do the basic parameters for the M&A market look like? On the seller side (entrepreneurs, corporations, financial investors and insolvency administrators), we in Germany are expecting things to continue picking up slightly from where 2015 left us. The age structure of the German population is reflected among the country’s entrepreneurs.

The advancing age of an ever greater number of entrepreneurs has been the source of an increasing number of succession planning cases. In the past several years, sales that have been deferred because of the sword of Damocles that low reinvestment returns have evoked are becoming increasingly urgent for age-related reasons. In addition, a certain sense of political and economic uncertainty is creating movement towards an ever greater willingness to liquidate or secure assets. Groups and affiliated companies continue to divest themselves of divisions that are defined as “marginal activities”, motivated also by the attractive valuation levels for investment assets. But this aspect is especially characteristic

of the private equity sector. All portfolio companies are analyzed after a short holding period for their potential saleability in order to partake of company valuations that are historically at record

levels. Assuming an average holding period of four to five years, approximately 20-25% of all portfolio companies of financial investors will be coming onto the market again in 2016. German insolvency law, which has been amended repeatedly in the last several years, is increasing the number of companies in crisis that are being put up for sale, and it is bringing about a decline in closure cases.

This supply, which in our assessment has been rising slightly, is being met on the buying side by a level of demand that remains extremely high. Since investments in business enterprises are significantly superior to fixed-income investments in terms of return and are less subject, or not subject at all, to scarcely calculable fluctuations in the equity markets, the already bulging funds in the private equity sector continue to fill up. At the same time, family offices are becoming increasingly professional and active in their interest within the asset class of direct investments in non-listed SMEs. The main category of buyers, the strategic, i.e. industrial buyers at home and abroad, likewise remains highly motivated to invest. Organic growth is coming up against saturation limits in most industries in the Western World. Company cash balances, which have been at healthy levels for years now as a result of record profits, can therefore be invested, if they are not to be distributed to shareholders, only in external growth opportunities, i.e. the acquisition of other companies.

On the whole, the demand for stakes in companies remains seriously in excess of the sup-ply. This further supports valu-

ation levels for investments in companies, which are at historic highs as mentioned above. But we expressly expect no further increase in the multipliers, but rather a tendency to consolida-tion at the level already reached.

Therefore, these basic parameters in the M&A market point to continued vigorous transaction activity in 2016. Many economic indicators at the national and global level support this positive outlook. The surprisingly steep decline in the price of crude oil is fueling consumption and lowering companies’ energy costs. The burdens on the relatively few companies that are suffering under this low per-barrel price – for the quantity has not declined – have, in our opinion, been exaggerated in the media.

Potential “shock waves” that might torpedo or spoil this all-too rosy scenario for the M&A market may, in our view, emanate from a conceivable escalation in the various political crisis areas around the world, or from a dramatic collapse in Chinese financial markets. Together we shall remain positive, and we wish you, and us, a successful year 2016, one that is unscathed by such shock waves.

OUTLOOK FOR 2016

Deal Report 201524

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Angermann M&A International AG was established in 1953 and is the oldest German M&A consulting firm with a focus on mid-cap transactions. We have 33 professionals working for our clients at three locations in Hamburg, Frankfurt am Main and Stuttgart. Angermann M&A International is the exclusive German team of M&A International Inc., the world’s largest organization of independent M&A consulting firms with 600 professionals in 67 offices and 43 countries. Roughly 70 percent of transactions in consultation with Angermann are cross-border transactions. This percentage, large by international standards, underscores the competence of M&A International Inc. (www.mergers.net), an organization that has been in existence since 1985.

Founder of the M&A Mid-Market Forum (www.midmarketforum.com).