What differentiates Odewald KMU from Anglo-Saxon private equity investors?
We differentiate ourselves through our clear focus on strong growing SMEs in the German-speaking region, and on sectors where our partners contribute operational experience. Odewald KMU enjoys an outstanding network in the German-speaking SME sector. Our partners have gained management experience in senior positions, and contribute their individual networks. A further difference is our multi-year experience as provider of private equity to companies in the German-speaking region. We have acquired these SMEs over almost one and a half decades, and have realised more than EUR 1 billion of equity investments.
What type of investment strategy does Odewald KMU pursue?
Odewald KMU invests between EUR 5 million and EUR 20 million of equity per transaction in majority interests (as well as minority interests in individual cases) in established companies with successful growth records in the German-speaking region. Preferred sectors include German engineering technology, services, health care and food manufacturing. Odewald KMU endeavours to enable former majority shareholders (company founders) to reinvest in their companies, as well as to be significantly involved in operational management. We attach importance to a moderate level of debt funding in the financing of investments.
How do Odewald & Compagnie and Odewald KMU differ from each other?
Both, the Odewald & Compagnie III and Odewald KMU funds, which are currently in the investment phase, concentrate in geographic terms on the German-speaking region, have a similar industrial focus, and attach great importance to the moderate deployment of debt funding in the investments. The main differences between the funds, however, relate to the size of the funds, particularly the level of equity investment, and consequently also the size of potential portfolio companies. While Odewald KMU invests between EUR 5 million and EUR 20 million of equity per transaction in established SMEs which have grown successfully to a level of sales of between EUR 20 million and EUR 100 million, Odewald & Compagnie III invests in each case between EUR 30 million and EUR 50 million of equity in profitable SMEs which enjoy strong potential, and generate sales of up to EUR 400 million.
What do typical investment situations look like?
Odewald KMU typically acquires a majority interest in the target company’s equity. The transaction is financed with a moderate debt funding, and envisages long-term partnership with the company. Odewald KMU generally takes two seats on the supervisory or advisory board. The chairman of this board is usually an independent personality, ideally with extensive and operational sector experience.
What course does the investment process typically take?
- Initial investment proposal at or by Odewald KMU
- Company and market analysis (pre-review of the investment)
- Letter of intent between the company and Odewald KMU
- Access to company data for Odewald KMU, followed by due diligence with external consultants
- Development of a long-term and sustainable corporate plan
- Negotiation and signing of an investment agreement
- Continuous and intensive strategic and operational support by Odewald KMU during the entire duration of the investment