AI Issue 7 2017

24 Acquisition International - July 2017 Fourteen years ago, a former banker from Deutsche Bank founded a company that opened up a niche in the market at the time. In the course of his banking career he had a advised a lot of small and medium- sized enterprises (SMEs) – and, in the process, had learned how well entrepreneurs understand their business – and how far their mindset is removed from that of the financial sector. Founder Arnd Allert explains: “Back then we saw immense potential in this area – which we wanted to exploit!” As it turned out, that was a great plan… is driving idea was: “Based on my experience at the time, I asked myself a simple question: why not combine the different mindsets with each other to open a new door to truly professional M&A transactions to SMEs?” The background: even back then, SMEs already found buyers and sellers. Back then there also already were a few consulting firms located throughout Germany that handled M&A business for SMEs, but essentially viewed themselves as brokers that primarily made contacts. The new DNA of the M&A business for SMEs This was where the former banker saw a promising opportunity: professionalisation of this business by making use of state-of-the-art valuation expertise and investment banking instruments, combined with the ability to translate this way of thinking and acting into the language of small and medium-sized enterprises. All three elements were in place – so all that was needed was to combine them and secure market acceptance for the new DNA of the M&A business for SMEs. Specifically, this meant establishing a team of transaction and valuation specialists, who on the one hand could provide evidence of their skills by being qualified as Certified Valuation Analysts (CVA), and on the other hand by having internalised entrepreneurial thinking and the mindset of banks. Potential becomes a market niche Arnd Allert started out with this concept, already knowing that – primarily on the sell side – a Company: Allert & Co. GmbH Name: Arnd Allert Email: Web Address: Address: Karl-Ludwig-Straße 29, Mannheim, 68165 Germany Telephone: +49 621 328 5940 Allert & Co.: M&A transactions involving German SMEs H 1705AI10 considerable potential was developing on the horizon: Even then it was clear that many small and medium- sized companies would be facing a generational change and how hard it would be for some entrepreneurs to pass on their life’s work into the hands of the next generation. In view of the known large number of SMEs, there was considerable potential here. Surveys show that nowadays one in five company successions involves the enterprise being sold to investors or to third party companies. Growing with the market Arnd Allert’s considerations turned out to be right. Business developed very quickly and once again he made a good decision: He soon brought his friend Matthias Popp, who also spoke both German and English, on board as a partner: up until then, he had been a board member of a leading global media and publishing group, and as such Matthias Popp understood the M&A transaction-oriented way of thinking as well as that of SMEs like only few others. And he was thrilled by what he saw: “Initially, as a client of Allert & Co., I saw how Arnd Allert approached things. Within a very short space of time, he sold several of our international subsidiaries, which was very impressive. Then, when he asked me if I would like to change sides and work with him, I didn’t need to consider his offer for long.” Over 100 transactions managed The concept started to “take off”. Arnd Allert and his team have completed over 100 transactions to date, which serve as proof of concept for his vision. For such deals involving small and medium-sized enterprises, the sweet spot is for companies with a turnover of between 20m and 250m. In this order of magnitude, the concept proved highly effective and achieves the desired results. Arnd Allert: “What particularly pleases me is that to date we have been able to complete over 50% of all transactions as cross-border deals – including “Surveys show that nowadays one in five company successions involves the enterprise being sold to investors or to third party companies.” € €