Why is valuation not the central question?

Owners who hand over a life's work rarely optimise the last multiplier. They optimise reliability, employee continuity, holding perspective, cultural fit, and the probability that the company will still exist in ten years.

Which structures are available?

Founder buyout with seller's loan, MBO/MBI with acquirer-platform, transfer to a strategic platform, foundation solutions under §80 BGB (German Civil Code), double-foundation models, and permanent-capital structures that offer a long-term holding perspective.

Which legal frameworks are relevant?

GmbHG and AktG for the corporate processes, the Inheritance Tax Act (ErbStG) for tax consequences, §613a BGB (the German automatic transfer-of-undertakings rule) for transfer of business, where applicable the Transformation Act (UmwG) for transformations, and EU Regulation 2019/452 on FDI screening for non-EU acquirers.

How many mid-market successions are pending?

Estimates from association statistics (KfW, Institut für Mittelstandsforschung Bonn, BVK, AVCO, SECA) point to a six-figure number of pending transitions in the DACH region over the next ten years, with demand significantly outstripping internal family solutions.

How long does an orderly handover take?

From first contact to closing, we plan for six to twelve months. The operational handover (leadership transition, customer handover, cultural detachment) can subsequently take a further twelve to twenty-four months.

Mid-Market Succession. Definition

Definition

What mid-market succession is.

Mid-market succession (German: Mittelstandsnachfolge) refers to the ownership transition in an owner-led company in the German, Austrian or Swiss Mittelstand. Structurally, mid-market succession differs from a competitive M&A auction: the reason for sale is biographical, not yield-optimised. Legally, it covers corporate processes under GmbHG or AktG, tax consequences under the Inheritance Tax Act (ErbStG) with its relief rules for business assets, the transfer of business under §613a BGB (the German automatic transfer-of-undertakings rule), where applicable transformation processes under the Transformation Act (UmwG), and, for non-EU acquirers, screening under EU Regulation 2019/452 (FDI screening). Common structures are the founder buyout with seller's loan, the MBO or MBI with acquirer platform, the transfer to a permanent-capital structure, and foundation solutions. Industry statistics from KfW, the Institut für Mittelstandsforschung Bonn, BVK, AVCO and SECA indicate a clear demand overhang relative to internal family solutions.

Demarcation

What mid-market succession is not.

Mid-market succession is not a valuation question. Whoever offers an owner who has built a company over thirty years a multiplier as the central sale argument has misread the situation. It is also not a classical buyout in the auction sense. An auction with information memorandum, Phase I, Phase II and auction dynamics is regularly incompatible with the biographical character of a handover. It is not a distressed transaction. Mid-market succession typically concerns healthy, profitable companies whose dislocation lies solely in the ownership situation. It is not a roll-up and not a pure platform acquisition, in which the company serves as a module for a fund story. Whoever understands mid-market succession as a sourcing problem for their own capital deployment will, as a rule, not get a contract.

Price does not open the door.
Reliability does.

Structures

How we structure successions.

Tactical Management structures mid-market successions following the four-phase logic of the acquisition and process page: first contact with a written assessment within 72 hours, confidential exploration with term sheet, structured due diligence with handover plan, closing with a clearly defined 0-180-day handover plan. The acquisition is made from permanent capital. The holding perspective is long-term, not driven by fund term. The handover itself follows a biographically sensitive logic: founder-buyout structures with staged payouts, seller's loans, optional retention of shares for a transitional period, a clearly defined leadership handover. Integration into an existing platform proceeds not abruptly but at a pace appropriate to the substance and to the people of the company being handed over. Methodologically, the handover is anchored in the three logics: valuation, integration, distribution. The Tactical approach therefore differs markedly from classical PE auction practice.

Practice

Successions in the Tactical portfolio.

The Karyali Group was acquired in the context of a succession resolution in which a conventional auction would have damaged the operating business. Boswau-Knauer originates from a constellation in which the succession question was structurally linked with a corporate carve-out logic. Darlot was transferred as a founder buyout into a platform structure, in which the founder figure remained operationally effective without blocking the transition as owner. Common to all three cases: no competitive auction, a single reliable acquirer, a holding perspective beyond the classical five-year logic.

Related Terms

In the glossary.

Special Situation — Structural dislocation beyond the auction.
Permanent Capital — Equity without fund term.
Platform Logic — Integrated operational unit as target structure.
Carve-out — Operational separation from the corporate group.
Distressed M&A — Acquisition in financial or operational dislocation.

Read deeper

From the Perspektiven series.

Submit a deal

Written first assessment within 72 hours.

Three ways to reach us. Confidential. Binding. Submit a deal →

Mid-Market Succession. Structures beyond the valuation question.