The automotive industry has long since switched to crisis mode. Numerous automotive suppliers already had to file for bankruptcy in 2020, and the sell-off has only just begun.

According to a current market assessment, only about 10 percent of suppliers are currently in a position to go on a shopping spree. The Corona crisis is creating opportunities here that can be exploited by the above-mentioned group of investors. Between 45 and 60 percent of suppliers have to choose between strengthening their current liquidity situation and inorganic growth. 30 – 45 percent of the suppliers are in survival mode and are currently not in a position to grow through acquisitions. The considerations are more in the direction of carve-out or total sale.

Thus, a high number of suppliers will keep a low profile and try not to get into liquidity difficulties. Already today, one expects up to 25 large transactions in Europe with a total value of around 12 billion US dollars.

The M engine will therefore continue to run, but under different signs. The consolidation is only just picking up speed and the valuations and multipliers are plummeting. As a result, the bargaining power on the sellers’ side will continue to decline.

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