The starting point when you want to buy a software company in Germany is to be clear on your own strategy. What are your unique selling points? Where do you differentiate from the competition? How is your corporate culture? What do you want to achieve with an acquisition? How well do you know the German software market? Have you spoken to any possible software targets? Do you know any companies you want to acquire?
We give you advice on buying a software company in Germany
If you are going to spend 1 to 10M Euro or maybe more it is wise to have someone at your side who knows the software market in Germany and who knows about acquisitions. Spending a relatively small amount on an advisor is money wisely spend. Maybe it helps you to buy the right and high quality software company in Germany instead of buying a software company that looks interesting but is not suited. An objective advisor at your side to brainstorm, get fresh ideas about possible interesting software companies is worth a lot.
The software market in Germany is one of the largest in Europe. Many acquisition opportunities exist in the German software market. Given Germany has one of the largest software markets in Europe it is important to understand this market and know which companies can be suited. The last years around €60 billion was spent on software and related services in Germany. The software market in Germany consists of many segments and IT security is an important one. Software for IT security is a significant part of the total German software market. German companies recognise that information is an organisation’s most valuable asset and use software to protect that information. The research project ‘German Software Champions’ clearly states that ICT security technology is an important segment in the German software market. In the German IT security market information security is a hot item. German companies are much more concerned with information security than companies in any other country. German companies are afraid of an attack on their IT system and use security software to protect them. This has given the software market for IT security products in Germany an opportunity to flourish. Good IT security companies to acquire exist in Germany.
A very important area for software companies in Germany is the area in Hessen. Here the Software Cluster Rhein Main is established. This software cluster consists of many software companies that are relatively close located. We have good access to this area and can help you find suited companies here. The Cebit is a yearly software and IT fair where a large number of software companies show their software products and services. Yearly more than four thousand companies from seventy countries visit the fair to show new software innovations. The CeBIT is organised in topic clusters and special offerings (of which software is one). Another important aspect to know about the German software market is that in Germany there is a shortage of software developers which increases salaries.
The software landscape in Germany is diverse. A lot of different type of software companies exist. Our German M&A team helps you find suited software companies that fit the profile of your firm. Here is an overview of some of the type of software firms we come across:
You will have a plan and some reasons why you want to buy a software company in Germany. Very often an important reason is that you want to enter a new market or you want to service your current customers in Germany as well. According to us there are plenty more reasons why to buy a software company in Germany. Germany has a good economy with a strong manufacturing base. The available income per inhabitant is high. Software companies in Germany normally have higher than average profits compared to other European countries. The country has a highly skilled workforce and the education is of a good quality. There is also many software firms that have industry specific knowledge. This software knowledge is often related to the manufacturing industry. Buying a German software business can be a start to enter the German speaking market. All these reasons make Germany an interesting country for software acquisitions and we are glad to help you with acquisitions here.
Many software companies exist in Germany. Here an overview of some of the larger software companies that are sometimes buyers of software players in Germany:
If you want to buy a software company in Germany it is important to understand the buying process in general. The process of buying a company is described in much more detail on the CFIE website. Buyers always underestimate the fact that a seller needs to see the synergies of a sale to your organisation as well. Hence you have to ‘sell’ your company to the software company you buy. This will make a purchase go much more smoothly. With European software business purchases cross border aspects are of importance. Hence, we focus very much on the building of a relationship between the buyer and the seller. If you want to read more about buying a company in general please go to the section of buying a business.
Software is starting to play an increasingly important part in the German companies with the program Industry 4.0. This program called Industry 4.0 is a project of the German government that promotes the computerisation of traditional industries such as manufacturing. The goal is to develop the “Smart Factory”, which means that software will be much more integrated in the manufacturing processes in Germany. This new program is characterised by adaptability, resource efficiency, and ergonomics. Software will be used to integrate customers and business partners in business and value processes. This will mean that there is much growth for software firms to be expected in Germany. You can buy yourself into this industry with an acquisition of a suited software firm.There will be a higher focus on information security applications for traditional industries such as manufacturing or engineering. These industries are encouraged by the German government to digitise to increase the productivity and stay competitive. These processes need IT security applications to ensure the security of data and processes. The security part of the software market is expected to grow swiftly. For many industries specific software applications will need to be developed. Here we show a few of the industries where we expect significant growth of software usage:
Our software people in Germany are supported by a much larger European M&A team. We have people with a strong software background across many countries in Europe. We have software M&A experts in countries like the Netherlands, Belgium, France, Spain and Italy. Here you can read further about buying a software company in general. You can also download our M&A in IT presentation if you want to know more about the people behind our European ICT and software team.
We have people with practical experience on how to buy a company in Germany. Our people have a software background and have executed the buying process many times. Once you have read more about how to buy a business in general we get back to the main item. This is how to buy a software company in Germany. The main differentiator is our understanding of the software industry in Germany. Our people are close to the software companies that exist in Germany and know many of the business owners. Please get in touch with us if you want to know more about how to acquire a software company in Germany.