The IT Services Industry in Germany
by NorthStar Corporate Finance
Since 1991, Germany has experienced a remarkable number of 68,488 M&A deals, reaching an impressive, combined value of €3.9tn.
However, by the end of 2022, there had been a noticeable dip in M&A activity, with only 2,897 deals announced. This represented an 11% decrease compared to the 3,267 deals recorded in 2021.
The total value of these transactions in 2022 also saw a substantial decline, amounting to €105.6bn, marking a 52% decrease from the €221.9bn recorded in 2021.
The trend continued into the first seven months of 2023, when approximately 1,217 deals were announced with a total value of €56bn. This signified a significant decrease of around 32% in the number of deals.
Despite the decrease in deal count, there was an increase of 4% in value compared to the same period in the previous year, which recorded 1,785 deals valued at €54bn.
Looking ahead, the projected number of M&A deals for the year 2023 is expected to be around 2,086, with a total value projected to exceed €96bn. These projections indicate a decrease of approximately 28% in the number of deals and a 9% decrease in total value compared to the previous year.
GCG member firm
NorthStar Corporate FinancePrague, Czech RepublicStuttgart, Germany
Hans BayerContact Hans
David WolfeContact David
The M&A market in 2023 has frequently been described as soft, or even weak.
The geopolitical situation and the resulting macroeconomic impact have left their traces everywhere in the world. Deal numbers and transaction volumes are down. Nevertheless, there is still M&A activity in the market and transactions are being carried out.
The German M&A market displays trends that can be found all over Europe, as well as in other regions of the world:
Financial investors are looking for opportunities that can be realised in an environment dominated by high interest rates. As a consequence, PE exits are seen more often than acquisitions by financial investors.
Following the coronavirus (COVID-19)-induced interruption, activist shareholders are again playing the role of catalyst for M&A activity.
Fueled by the COVID-19 pandemic and aggravated further by geopolitical tensions resulting from the war in Ukraine, existing protectionist tendencies have translated into strict foreign direct investment regimes, on a national as well as European Union (EU) level.
The Germany IT market size was valued at $130.4bn in 2027, with a CAGR of 4.12% from 2023 to 2027.
The growth of the market depends on several factors, including the increased adoption of IT solutions among SMEs and of cloud-based services by enterprises, plus the enhanced digital infrastructure in Germany.
The German IT market report extensively covers market segmentation by end-user (manufacturing, government, BFSI, ICT, and business services and others) and application (large enterprise and SMEs).
Germany IT sector Market size 2017-2027
Number & Size of M&A transactions in Germany
Selected deals of reference:
GBC Group GmbH, a portfolio company of Pride Capital Partners BV, acquired Bolde GmbH for an undisclosed amount. The acquisition expands GBC Group GmbH’s service offerings and its geographic presence. (2024)
GOD Gesellschaft Für Organisation und Datenarbeitun gmbH, a portfolio company of Waterland Private Equity GmbH, acquired Conwiss Consulting GmbH for an undisclosed amount. This acquisition strengthened the position of GOD Gesellschaft Für Organisation und Datenarbeitun gmbH. Conwiss Consulting GmbH is a business management consultant located in Berlin. (2024)
Paradox Networks GmbH acquired FERNAO Networks Holding GmbH for an undisclosed amount. The acquisition complemented the business of Paradox Networks GmbH. FERNAO Networks Holding GmbH is located in Cologne, Nordrhein-Westfalen, and provides cyber security, infrastructure, information security consulting and cloud platform services. (2023)
