PCG AG completes Funding research study with Mittelstand companies

The Private Equity Consulting Group (PCG AG) completes

Funding research study with Mittelstand companies

The Private Equity Consulting Group (PCG AG) has completed a funding research study with Mittelstand companies. The study included over 500 participating companies in German speaking Europe and was addressing the analysis of funding difficulties of Mittelstand companies, satisfaction levels with the banks, product development ideas etc.

The study differentiates smaller Mittelstand (up to 50 million Euro annual turnover) and large Mittelstand (above 50 million Euro turnover).

The majority of large Mittelstand companies have significant access to all sorts of financing solutions ranging from mezzanine, classic equity to capital markets and debt solutions.

Given the attractive interest rate environment and the fact that local as well as international banks are providing extensive liquidity in this segment, the companies are mostly in good shape and positive regarding future expansion.

On the large end of the market the over-supply of equity products and the involvement of a lot of private equity funds result in a decrease of prices for the Mittelstand down to something like 7% for unsecured mezzanine solutions. The normal market expectation of mezzanine investors would be more in the region of 12-15%, for classic private equity above 20%. "As a consequence the majority of CFOs of these companies have positive comments about their access to funding and future outlook", explains Silvia Steinbach, partner of PCG and responsible for the survey.

A very different picture is shown in the segment of the companies below 50 million Euro turnover. This segment represents millions of companies as compared to the large Mittelstand segment where we talk about some thousand companies.

This much larger market segment gets a lot less attention from the banking community. The products are highly standardized if they exist. There is no attractive equity offers for this market segment as this business is too time consuming and many times too unattractive for the banks. As a result they have to take the few state sponsored programs on the equity side and the classic debt leveraging the companies to extremes.

Also these smaller players have potential and they are mostly open to look at other alternatives. There PCG gets involved in complicated structuring situations" comments

Dr Harald Lusser, partner at the Private Equity Consulting Group. The existing bank programs are most of the times too rigid to reflect the real needs of these companies.

At the same time the margin pressure of the banks on the larger side of the market will foster new product development of the banks also for the smaller Mittelstand clientele. Only then they will become more satisfied with the services of their banks.

The Private Equity Consulting Group (PCG AG) is a private equity, M&A and structuring boutique based in Switzerland.

For more information contact: Harald.lusserpcg.ag www.pcg.ag

10.06.2005 - 16:04 Quelle: pressrelations.de | Gelesen: 656 X