Investment philosophy

Making successful
companies even
more successful

The potential of a company depends on many things. People, markets, products and processes – everything has to work together so that ever-new perspectives can emerge. If we see them, we invest in the potential. Sustainable, well-connected and maintaining the company's identity. This is how we make successful companies even more successful.

Occasions for an investment by Odewald KMU

Odewald KMU invests in attractive small and medium-sized companies whose owners are looking for an entrepreneurial succession solution or a financially strong partner for further growth. In addition, we support industry consolidation and support managers in becoming entrepreneurs (management buy-outs and management buy-ins).

Our focus? We invest in companies in order to realise their potential and to sustainably increase the value of the company. We usually acquire majority shareholdings and always work closely together and in partnership with the previous shareholders and management. We contribute not only with capital and tailor-made financing. What distinguishes us are entrepreneurial expertise, a broad network within industry and public administration, as well as the systematic involvement of active advisors.

We do not make investments in a transaction-orientated way, but rather as part of a joint growth story of all stakeholders. Because this is our conviction – value is created through the quality of the partnership.

Succession solutions

Companies facing a succession solution strive for continuity and new perspectives. We create them by actively involving the departing shareholders and management and by maintaining the identity of the companies – responsibly and in a future-orientated way.

Growth financing

Growth requires financial strength and entrepreneurial expertise. We contribute both and support our portfolio companies with growth capital for organic growth, as well as for acquisitions – holistically involved and long-term value adding.

“Founders usually experience a succession situation only once in their lives. It is therefore all the better to have a partner at your side who has already successfully managed many of these sorts of situations. With Odewald KMU, an adequate succession plan was implemented smoothly.”

Michael Laumann
founder of Langer & Laumann

“With Odewald KMU, we have found a committed and reliable partner for univativ. Through the professional network of Odewald KMU and the advisory board, we were able to sustainably accelerate our growth and successfully implement our buy & build strategy in Germany and abroad. The five-year cooperation with Odewald KMU was valuable in every aspect and fully met our expectations. It enabled us to further expand our market leadership in the German-speaking regions and to sell the company very successfully on this basis.”

Olaf Kempin
founder of univativ

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“The fact that Polytech-Domilens has been established as a leading provider of technologies in ophthalmological eye surgery is also to the credit of Odewald KMU. In addition to implementing a succession solution, we have jointly driven forward market consolidation. Together with the experts from Odewald KMU, we mastered the challenge of the company’s succession, formed a group operating across Europe by acquiring competitors, and realised a successful divestment process in the end.”

Rolf Reese
founder of Polytech

Partnership model for growth and value creation

Odewald KMU is more than just an investor. We see ourselves as partners of small and medium-sized companies and act like that, too. In doing so, we focus on continuity, preserve existing corporate cultures, and stand by our portfolio companies with expertise and capital in questions of strategy, financing and operational development. Open communication between partners plays an important role in this. This is essential because, in an investment, value is created through the quality of the partnership. The broader the common foundation, the more successful the cooperation. We are convinced of this – which is why we have developed a partnership model which structures our cooperation precisely and that we live by consistently.

Partnership with vendors and management

 

Further involvement of vendors and management through a (re-) investment in the company
  • We offer vendors the opportunity to continue to hold a capital interest in the company even after the transaction.
  • This gives entrepreneurs the opportunity to realise part of the created values while still contributing with expertise and know-how, and to profit from the joint increase in value.
Creating clear contractual arrangements
  • For all our portfolio companies, we have concluded comprehensive shareholder agreements which form a fair basis for partnership-based cooperation in the future.
Implementing sustainable succession solutions
  • Together with founders and shareholders, we develop suitable succession concepts, individually planned and implemented.
  • After successful implementation, the vendors often move to the advisory board of the portfolio company.
Involving the management team financially
  • Successful companies have a strong operational management team, as well as experienced, long-term employees at the second level.
  • Odewald KMU provides the existing and new management with the possibility of financial investments and thus incentives to remain associated with the company in the long term.
Building solid financing structures
  • Odewald KMU finances the investments with a balanced and conservative mix of equity capital and bank debt.
  • The individual requirements of the portfolio company determine the financing structure.

 

Implementation of a joint strategy
  • In cooperation with founders, shareholders and management, Odewald KMU develops a common strategy with clearly defined goals and milestones.
  • A distinguished advisory board supports the implementation of this strategy.

The various elements of our partnership model are perfectly intertwined and create a solid foundation for cooperation between the vendors, management and the investment team of Odewald KMU..

Odewald KMU Value Add Principles

We also support our portfolio companies in implementing their growth strategies by establishing the proven Odewald KMU Value Add Principles. Consistently implemented, these Value Add Principles have proven to lead to significant increases in earnings and value for our portfolio companies.

Odewald KMU – Icon Beirat

Distinguished advisory board

We appoint advisors who actively create value. What makes us so sure? With our many years of expertise and our network in industry, science, public administration and politics, we find personalities who effectively promote our investment companies with their knowledge and provide valuable impulses for further growth.

Odewald KMU – Icon Weiterentwicklung

Operational development

We initiate structural and process optimisations. Our view from the outside helps us to achieve this. We have many years of operational experience and thus deep insights into comparable companies and bring optimisation knowledge from similar projects with us. This means we can support our portfolio companies in realising potentials and on their way to the future.

Odewald KMU – Icon Wachstum

Buy & build / Organic and inorganic growth

The aim of our investment activities is to further develop the respective business models and market potentials of our portfolio companies and to open up new perspectives. Where appropriate, possible or necessary, we also support our portfolio companies in identifying, addressing and implementing acquisitions and thus actively consolidating their industry or market niche. In brief – we invest in order to grow with the company.

Odewald KMU – Icon Digitale Transformation

Digital transformation

We lead our investment companies into the future. A key and central lever for this is the successful digitisation of processes – from research and development to production, to marketing, sales and customer relations. That is why we are pushing ahead with the digital transformation.

The typical investment process

01

Company and market analysis

Does your company fit with us and our portfolio? Odewald KMU invests specifically only in small and medium-sized companies with high-growth potential from Germany, Austria and Switzerland. Entrepreneurial potential and future viability are crucial. In addition, there are other criteria.

Investment occasions:
Successions, growth financing, corporate spin-offs

Sector focus:
German engineering, intelligent service solutions, healthcare, IT & software

Transaction volumes:
We invest between 5 and 30 million euros of equity per transaction

Type of investments:
Majority investments, minority investments are possible in exceptional cases

02

Letter of intent

If the company and market analysis is positive, we initiate the actual transaction process in the form of a letter of intent. In this document, together with the vendors, all important subjects for the realisation and the structuring of the investment are defined and recorded in writing.

These include, for example:

  • Motivation and goals of the transaction
  • An indicative company valuation
  • Criteria for determining the purchase price
  • Type of financing
  • Structure of the planned transaction
  • Approval issues and antitrust law
  • Timeline
03

Due diligence

The execution of the transaction as elaborated in the letter of intent is subject to successful due diligence. In other words – a comprehensive company audit satisfactory to Odewald KMU. This involves analysing the financial figures and other documents for a previously defined period covering several financial years. All assumptions and premises included in the letter of intent should be confirmed.

The most important due diligence areas:

  • Market analysis
  • Competitive positioning
  • IT and processes
  • Finance and taxes
  • Legal situation and insurance
04

Development of future corporate strategy and business plan

The due diligence process usually results in initial ideas for sustainable value creation. We then take these up in a dialogue with each other and develop a joint business plan on this basis. The aim is to exploit growth opportunities as effectively as possible, to leverage further market potential, and to minimise any existing risks.

The focus is on the following areas:

  • Revenue and cost planning
  • Production planning and product development
  • Marketing and sales planning
  • Development of a financing structure
05

Negotiation and conclusion of the share-purchase agreement and the shareholder agreement

Clear contractual regulations lay the foundation for successful long-term cooperation that creates value in the best sense. We therefore conduct the negotiation and conclusion of the share purchase agreement and the shareholder agreement with due care and intensity – for the benefit of all parties involved.

06

Continuous strategic support

During the holding period, we do not support our investment companies solely through financial commitment. We also bring to the partnership our entrepreneurial know-how and expertise from numerous investments. We appoint distinguished advisors and create value-add through our network in industry, science, public administration and politics. This is how we support strategic decisions and set the course for growth. Nevertheless, the operational management always remains with the management of the portfolio companies.

Want to know more?

We are here for you and are looking forward to a dialogue with you! Select the appropriate contact person now and send us your inquiry. We will get back to you immediately.

Your contact person for
Heiko Arnold

Partner

h.arnold@odewaldkmu.com

Oliver Schönknecht

Partner

o.schoenknecht@odewaldkmu.com

Joachim von Ribbentrop

Partner

j.vonribbentrop@odewaldkmu.com

Your inquiry