Uncovering the German care market from an M&A perspective

The social care system and the strong fragmentation of the care market are essential in describing the steady M&A attractiveness of the German silver economy. Despite the high density of regulations, the care service sector has been subject to targeted consolidation phases by larger pan-European care providers and financial investors who are geared to a buy-and-build strategy. Given the prevalence of fragmentation, the current fierce competition amongst investors is driven by the limited number of sizeable targets. Additionally, we see the growing potential of digital add-ons to the current landscape, a topic that we looked into further detail in the course of our work.

In light of the current pandemic challenges, the high relevance and urgency of anti-COVID-19 measures has shifted short-term priorities of care providers from maximizing value to optimizing their own crisis management capacity and processes, and developing alternative solutions to old problems. In this way the pandemic has accelerated the digital transformation of the healthcare system and has unveiled positive side effects that are increasingly being noticed by critical investors.

Recent regulations to foster the use of digital technologies combined with associated financial subsidies and stimuli form a dynamic business environment that particularly attracts established providers of digital care solutions, start-ups as well as venture capitalists. Although the COVID-19 outbreak led to an initial unexpected shock-induced numbness for investments, a recovery in transaction behaviour with similar patterns as before the outbreak is expected.

In an era that is characterised by demographic change and continuously growing demand of care, digital technologies and applications to counteract these associated challenges will become indispensable for the silver economy. We sense a strong entrepreneurial spirit that pushes the boundaries of eCare and eHealth solutions to new dimensions. While the build-up of such businesses requires endurance and external support, these are the next digital business models to define and penetrate the care market.  

The convergence of care and the digital world will ultimately lead to an increasing number of transactions. Our team of experts at Warth & Klein Grant Thornton are here to help you navigate these challenging times and advice you on how to best attain your M&A plans.

Contact

Hanno Hepke
Partner
T +49 40 43 218 6235
E hanno.hepke@wkgt.com

Alex Refec
Senior Manager
T +49 40 43 218 6216
E alex.refec@wkgt.com

Sabine Fahrenholtz
Manager
T +49 40 43 218 6218
E sabine.fahrenholtz@wkgt.com