PRIVATE EQUITYNewsletter QUARTERLY SPECIAL | EDITION 2/2018

CLOSED DEALSfor fi rst half of 2018 within the German-speaking region

NEW DEAL FLOWJanuary 2017 - June 2018in German-speaking region

MOST RECENT STUDIESby Roland Berger

Private Equity NewsletterQuarterly Special | Edition 2/2018

Roland Berger2

We hope that you had a successful second quarter in 2018 closing recent deals and investigating new opportunities. This Newsletter provides an overview of the deal-flow in the first half year 2018 and looks at political developments influencing the private equity market as well as recent studies.

PE-related deal activity in the DACH region has again been strong in the first half of 2018, being reflected in 98 closed deals; this represents a comparable level to 2017 (H1 2017: 94 closed deals). New deal-flow has held up well since the beginning of 2018; in Q2/2018, there have been 118 deals being closed or currently in the M&A process and there are indications for a positive outlook for the remaining year 2018. In terms of industries, deal activity has been highest in Engineered Products, Consumer Goods and Healthcare; on the contrary, Transportation and Energy showed only weak deal activity, reflecting the increasing challenges within those segments.

From a wider political perspective, uncertainty remains a key concern for the private equity com-munity: While the conflict between the US and North Korea appears to have calmed down for the moment following the summit of both countries’ leaders in Singapore, the risk of a trade war has increased (e.g., tolls on steel in the US, EU putting tolls on selected US products, China charging tolls for US agriculture products), potentially having a direct negative implication on PE funds’ portfolio companies. Within Germany, the conflict between German chancellor Angela Merkel and her minis-ter of internal affairs Horst Seehofer with respect to the refugee debate has weakened the German coalition and has further intensified the debate also on a European level. Moreover, the newly-elected government in Italy announced a change in attitude towards the previously agreed austerity program, further driving complexity in negotiations between EU member states. In H1 2018, capital markets have remained strong with leading economists expecting a continued robust economic development in Europe.

Recent studies by Roland Berger address the mega trend artificial intelligence (AI) as well as changes driven by millennials through the publications “Artificial Intelligence – A strategy for Euro-pean startups” and “Millenials – The generation reshaping travel and shopping habits”. Furthermore, we want to highlight the key Healthcare study “Roland Berger Krankenhausstudie 2018” which re-flects current trends and sentiments in the Healthcare sector. Together with the German Private Eq-uity and Venture Capital Association (BVK), Roland Berger published the study “Treibstoff Venture Capital”, which identifies the central barriers to invest in Germany and how these barriers can be overcome by market participants. Our study “Survival of the Fittest” sheds light on structural chang-es in the automotive aftermarket, accelerated by a series of M&A activity in recent years.

The Roland Berger’s Investor Support Practice wishes you a good flow of leads and successful transactions, on which we will be happy to support you.

Yours sincerely

Christof Huth

Marc Hesse

Dr. Thorsten Groth

Dr. Gerd Sievers

Dr. Sascha Haghani

Christof Huth

Sven Kleindienst

Dr. Gerd Sievers

MarcHesse

Dr. Sascha Haghani

Dear Clients, dear Friends,

Dr. Thorsten Groth

Sven Kleindienst

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CLOSED DEALS IN GERMAN-SPEAKING REGION 2001 - 2018 YTD# closed PE-relevant dealsSource: Roland Berger

2001

40

2002

74

2003

81

2004

104

2005

10020

17

2018

YTD

204

98

2006

163

2007

166

2008

122

2010

136

2011

113

2012

12520

15

161

2016

168

2013

110

2014

119

2009

79

Closed deals for first half of 2018

The number of closed deals in 2018 amounted to 98, comparable to the previous year’s level of 94 private equity backed acquisitions in H1. With respect to the second quarter of 2018, the number of closed deals has been at 39, being lower compared to Q1/2018 (59 closed deals).

In H1 2018, the leading deal makers in terms of number of deals were Capiton, Paragon Partners, Ufenau Capital Partners, Nordic Capital, H.I.G Capital; EQT, and Waterland with 3 deals each, fol-lowed by AURELIUS, Avedon Capital Partners, Bregal Unternehmerkapital, Castik Capital, DPE Capital, Equistone Partners and Triton Partners with 2 deals each.

Deal activity in H1 2018 remains good

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The first half of 2018 has seen a continuously strong deal-flow with 258 deals, compared to 247 deals in H1 2017. Especially, Q2/2018 developed better with 118 deals compared to 101 deals in Q2/2017, resulting in another year with a high level of PE activity in the DACH region. Most of the 22 current deals in June are still ongoing, indicating a positive outlook for the third quarter of 2018.

DEAL FLOW PER MONTH IN GERMAN-SPEAKING REGION Jan 2017 - Jun 2018# deals by statusSource: Roland BergerAlso includes announced but not yet fully completed deals1

Current WithdrawnRumored Dormant Closed

146

2017 2018 YTD

Mar

23

8

12

43

Feb

16

6

37

59

Jan

11

33

44

101 102 115 118140

Jun

16

2

19

37

Sep

15

5

31

51

Dec

7

1

25

33

Jun

22

3

14

39

Mar

10

83

17

35

Mai

19

3

15

37

Aug

4

15

19

Nov

14

19

15

48

May

18

8

14

40

Feb

35

6

26

67

Apr

14

13

27

3

Jul

12

17

32

6

7

21

34

Oct Apr

10

26

39

Jan

11

26

38

1 The difference in “closed” deals in the deal flow statistic (on this page) compared to the “closed deals” statistic (on the preceding page) is due to the time delay between announced deals (in deal flow statistic) and legally closed and signed deals (in closed deals statistic)

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DEAL FLOW PER MONTH IN GERMAN-SPEAKING REGION Jan 2017 - Jun 2018# deals by industrySource: Roland Berger

IT/TelecomsTransportationOtherConsumer goods

ChemicalsAutomotive Energy

Engineered productsHealthcare

The PE market in the DACH market continues to see most activity in the segments Con-sumer goods as well as Engineered Products (49 and 77 deals respectively in H1/2018). In addition, an increased deal activity in the Healthcare segment has been observed in 2018, being reflected in larger transactions, e.g., Alloheim/Nordic Capital. Furthermore, deal ac-tivity in the Automotive industry remains stable, while the Transportation and Energy seg-ments continue to show rather limited deal-flow.

Jan

6

3

5

2

6

4

9

9

44

146 101 102 115 118140

Feb

6

17

11

6

7

4

59

5

3

Mar

4

5

4

13

11

1

43

4

1

7

15

51

27

Apr

6

2

Mai

5

8

4

9

42

37

1

1

3Jul

4

41

8

7

2

32

1

5

Oct

3

7

3

5

11

34

5

8

5

7

Sep

10

16

51

14

4

8

7

1

10

33

3DezAug

4

5

2

1

41

191

1

3

6

6

9

14

2

48

2

1

5

Nov

7

7

6

6

10

39

3

Apr

3

7

6

6

10

38

1

2

3

Jan

2

6

5

8 8

12

40

2 1

5 5

May

8

5

41

14

21

1

67

4

9

Feb

6

14

3

10

39

Jun

7

2

2

7

14

35

2Mar

3

7

6

Jun

4

11

1

37

1

4

2017 2018 YTD

1

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TARGETTARGETMagixMaschinenbau Hebrock

mefro wheels

MeinAutominCamMungo BefestigungstechnikNavabiNL-Holding Ober ScharerOskar NoltePERLKÖNIG Perlen & Schmuck & ZubehörPferdeklinik GrosswallstadtPiz‘Wich EuropePloucquet

Procrea GroupRaetz GerüstbauRECATRepair Concepts

Sauter FedernSchletterSchroth Safety ProductsSecura IndustriebeteiligungenSilexicaSimply Logistics SystemssmavaSolopress

Starz surf4shoesSwiss Education GroupSwiss Medical Imaging InvestmentSwyx SolutionsTENADOThe Packaging GroupThurn ProdukteUNICEPTA Gesellschaft für MedienanalyseVTU HoldingWEMAS Absperrtechnik GmbH

7days Marc Staperfeld ABO Flitertechnik NordACT IT HoldingAGVS HoldingAir AllianceAlbrecht & Dill CosmeticsAllgeier Medical ITAlloheim Senioren ResidenzalphaBit

ALVI - Alfred ViehhoferAmann Girrbach AGAscoraAVS Verkehrssicherung GmbHBauwerk BoenBBS AutomationBeinbauer GroupBetter TasteBFC FahrzeugteileBiofidesBosch Mahle TurboBOTABrugg KabelCareerFoundryCEMARCeramTec

coeo InkassoCompassioCompetence Call CenterConcept

CONET TechnologiescopperING

DermedisDoctariDornier Consulting InternationalDPG Deutsche Pflegegruppeebm Maschinenbau

ElatecETC - Enterprise Training CenterFEBA AutomationFranke IndustriesGermanPersonnel e-searchGiesserei AlbbruckGothaer FahrzeugtechnikH. Vollmer

HeizkurierHFPIBYKUSIPANISPINItertalklinik Seniorenzentrum

KA InteriorKBLKnauer-UniplastKorona CandlesKytoLanger & Laumann Ing.-BuroLarsen Indoor Light Concept

Lautsprecher TeufelLearnship NetworksLifebrainLogis

BUYERBUYERCapitonWilhelm Altendorf (Avedon Capital Partners)Accuride Corporation (Crestview Partners)Hg CapitalHarald Quandt IndustriebeteiligungenFinatemVerdane Capital AdvisorsOaktreeNordic CapitalPeter MoehrleMaxburg Capital Partners

Altano Gruppe (Ufenau Capital Partners)frostkrone Tiefkühlkost (EMERAM)CONSTANTIA Beteiligungs (CBAG) and TECHTEXNL-Holding (Oaktree)B+P Group (AURELIUS)FINEX SICACV SIFFair Damage Control Holding (Ufenau Capital Partners)Pinova CapitalGolden Square CapitalPerusaPerusaEQTFloris CapitalVitruvian Partners, Runa CapitalOnlineprinters (Bregal Unternehmer-kapital and Project A Ventures)NorthCapitalHR Group (Capiton)Summer CapitalRAD-x (Gilde)WaterlandMaxburg Capital PartnersHQ EquitaQuantum CapitalParagon Partners

DPE Deutsche Private EquityParagon Partners, GIMV

Sliverfleet Capital PartnersWaterlogic (Castik Capital)Conet (H.I.G. Capital)Süd BeteiligungenDPE Deutsche Private EquityECM Equity Capital ManagementRVC (MainCapital)Nordic CapitalSwiss IT Security AG (Ufenau Capital Partners)Noppies (Vendis Capital)Capvis Equity PartnersDRS InvestmentTriton PartnersEGS BeteiligungenEQTH.I.G. CapitalAURELIUSTriton PartnersPharmalex (Auctus Capital)FountainVestchicco di caffe (Paragon Partners)SOLIFOS (HVD Partners)Verdane Capital AdvisorsThink project! (TA Associates)BC Partners, Ontario‘s Pension Plan, Public Sector Pension Investment BoardWaterlandSchones Leben Group (Waterland)ArdianMB Mittelständische BeteiligungsgesellschaftH.I.G. CapitalGehring Technologies (Penta Investments)Rigeto UnternehmerkapitalVitruvian PartnersPalero CapitalBregal UnternehmerkapitalWilhelm Altendorf (Avedon Capital Partners)Summit PartnersAspire Education Group (Quadriga)Piab Invest AB (EQT)Europoles (VTC)The Riverside CompanyNavigator CapitalFinatemLDBS Lichtdienst GmbH (Beyond Capital Partners)OdewaldNORD Holding/GradienteVM Capital AdvisorsCastik CapitalMBO (Capiton)Alloheim Senioren Residenzen (Nordic Capital)Vivonio Furniture (Equistone Partners)DIH Deutsche Industrie-HoldingBlue CapGALA Kerzen (Equistone Partners)VerdaneOdewaldLDBS Lichtdienst (Beyond Capital Partners)NaxicapTHI InvestmentsInvestIndustrialIT Beteiligungs (Alpina)

DEALS CLOSED IN H1 2018 WITHIN THE GERMAN-SPEAKING REGION

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Presenting Roland Berger’s most recent studies

Artificial Intelligence – A strategy for European startupsArtificial intelligence (AI) is set to revolutionize production processes, enable better and new services for customers, and transform the way that companies work. As production of goods and services become truly digital, the traditi-onal relationship between production facilities and human resources will change. AI, besides improving productivi-ty, will become a factor of production like capital and labor. The new technology will also have a major impact on the competitive positioning of players: Investing in AI not only cuts costs but by the same token enhances the competitive advantage of firms that innovate.Roland Berger and Asgard partnered up to provide the first comprehensive overview of the global AI ecosystem based on data from startups in all regions of the world. The data collection focused exclusively on startups working in AI technology, ignoring firms involved in other digital topics and technology, such as hardware-only startups and the R&D departments of corporations. Within this, the study further focuses on startups producing AI solutions, and expressly excludes startups using existing AI solutions on the market to develop new services or products. Roland Berger evaluated the information on 3,465 startups to define their geographical distribution and reach. The study looks at two key variables: the main sector that the company focuses on, narrowed down to the 26 commo-nest industries, and the main technology used or provided.

Millenials – The generation reshaping travel and shopping habitsIn few sectors have Millennials had more impact than in travel and tourism. Their expectations and behavior are significantly different from their parents’ and older generations’. Their whole travel journey has changed, from the initial inspiration phase to the actual travel and holiday experience. The importance of social media as influencer on the choice of holiday for example, the quest for authentic holiday experiences and off-beaten track adventures, the demand for personalized services, their awareness of security threats…. Changes are happening along the entire value chain.The study “Millenials – The generation reshaping travel and shopping habits” takes a closer look at the consumer behavior of this age group and provides insights based on three archetypes, namely “the new globe traveler”, the new globe shopper” and “the new globe experiencer”.

Roland Berger Krankenhausstudie 2018 (GERMAN ONLY)While the majority of hospitals has seen revenue growth in the past year and is expecting further growth for 2018, the economic situation of most hospitals has been slightly deteriorating in 2017. In the past fiscal year, approximately 41% of the interviewed hospitals were not able to generate a surplus. Furthermore, hospital managers are expecting a further deterioration for the fiscal year 2018 and circa 60% expect this development to continue in the mid-term. The most critical challenge for hospital is seen to be the lack of qualified personnel and the increasing investment volumes needed for an improved medical standard. While hospitals have been investing sufficient amounts into new technologies over these past years, these investments are often debt financing, posing a potential risk for the institutions in case of interest rate increases. The “Roland Berger Krankenhausstudie 2018” takes a deeper look in the market development and also puts an emphasis on the role of medtech companies and their impact on the healthcare market.

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For further information, questions or remarks please contact:

ROLAND BERGER GMBHInvestor Support, Sederanger 1, 80538 Munich, GermanyLejla Kalajevac, Phone +49 89 9230-8250, Fax +49 89 5485-8250, lejla.kalajevac@rolandberger.com

Treibstoff Venture Capital – Wie wir Innovation und Wachstum befeuern (GERMAN ONLY)Venture Capital is more than a financial instrument or an asset class. It is a central propellant for entrepreneurship, innovative future technologies and a prosperous growth – all key factors in the global technology competition. Whether Germany will be able to lift the potential which lies within new, digital technologies and will be able to remain a state with a high level of welfare is also highly dependent on the ability to raise further Venture Capital in order to support innovative startups. This joint study between the Internet Economy Foundation (IFE), Bundesverband Deutscher Kapitalbeteiligungsge-sellschaften (BVK) and Roland Berger identifies the central barriers to invest and how these barriers can be overco-me by market participants.

Survival of the fittest (GERMAN ONLY)The automotive aftermarket is facing strong structural changes which have been reflected in a strong M&A deal activity over the past years. This study analyzes the transformation of the industry and provides food for thought how market players can position themselves. In April 2018, Roland Berger published the first study of a series („Konsolidierung im europäischen Kfz-Aftermarket“) which focused on the general trends of the industry. The upcoming studies, including this edition, are focusing on details for those identified trends.This publication sheds further light on the M&A activity in Europe. Since 2015, more than 65 deals have been identified of which almost half have been executed in 2016 and 2017, displaying the strong acceleration of the structural changes. Furthermore, the deals have been significantly increasing in average deal size. One of the key drivers are the market entrance and active consolidation by American market players. Following this trend, key questions arise (e.g.: how can a post-merger-integration be implemented efficiently?) for which this study provides food for thoughts.