Alvarez & Marsal: German Private Equity Sees High M&A Activity

Alvarez & Marsal's analysis indicates a surge in merger and acquisition (M&A) activity in Germany's private equity market during the first half of 2021. The firm reported that the number of deals more than doubled compared to the same period in the previous year.

Speed emerged as a critical factor in winning transactions. The analysis noted that typical process letter deadlines were often surpassed as funds aimed to preempt and successfully secured deals. This trend impacted several notable transactions.

The analysis also highlighted elevated valuation levels within the German market. Major deals, including a significant financing round for FinTech company Trade Republic Bank and the acquisition of footwear brand Birkenstock, underscored strong market interest. The healthcare sector also demonstrated substantial transaction activity.

Alvarez & Marsal concluded that the M&A boom, partly fueled by deals delayed due to the pandemic, kept the market highly active. The question of whether current high valuations would revert to historical norms or establish a "new normal" remained open.