Family Office and Young Owners – The fair value exploration

It is crucial to understand HOW the company will be making money

Family owned SMEs are highly sought by investors and the prices continue to rise because of the increasing sum of capital flows into mainly PE funds. At the same time the interest of Asian investors in companies from the DACH region is growing. Transactions are receiving multiple bids which results in too much capital chasing too few deals due to opportunistic and limited sources of deals.

The number of PE firms offering diverse private market strategies with a need to invest enormous sums of dry powder keeps increasing. Furthermore, Family offices are increasingly making direct investments and becoming a stronger competitor for strategic investors and private equity funds. With so many investors in the industry, potential targets are likely to receive multiple offers as financial and strategic investors must bid aggressively to win price auctions.

Next-generation family offices are increasingly becoming a preferred buyer, as the focus is on the long-term continuation of the business and very specially on succession options.
It is crucial to understand HOW the company will be making money rather than how much money. The advantage lies in the value-preserving and long-term orientation of family offices, as they are not invested out of a fund lifetime and are not subject to exit pressure.

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