Special situations. DACH PE in distressed, carve-out and succession.
Special situations arise where regulatory, corporate-law or operational friction interrupts the orderly market process. Anyone investing in the German Mittelstand from Munich, Vienna and Baar works almost exclusively in precisely these gaps. This pillar page organises our articles on the discipline.
Why special situations are the actual discipline
In the classical auction process, healthy companies are sold with full information, three indicative bidders and an eighteen-month run-up. The returns achievable there are a function of liquidity in the asset class. In 2021 and 2022 entry multiples for mid-sized industrial companies in DACH temporarily reached twelve times EBITDA. No substance return arises from such a configuration. What arises is an arithmetic problem.
Special situations follow a different logic. They arise because a company is under liquidity pressure and its StaRUG (German pre-insolvency restructuring framework) plan is in the preparation phase. They arise because a corporate group has to spin off a division that does not fit the strategic core profile but whose carve-out would be unclean from an accounting, operational and antitrust perspective. They arise because a founder, at sixty-seven, realises that none of his three sons will take over the company, and the bank only grants the refinancing under conditions.
In each of these configurations, price is not the primary object of negotiation. The primary object is the structuring capacity of the acquirer. Whoever can coordinate an asset deal with fifteen contracting parties from a standing start, run an insolvency plan within InsO §270b, or cleanly orchestrate a carve-out under §613a BGB (German Civil Code, transfer of business) operates with a different room for manoeuvre than a bidder working with a standard SPA and a three-week due-diligence window.
The regulatory frame in DACH
German law has, in recent years, created several instruments that make special situations technically tractable. Since 2021 StaRUG has allowed preventive restructuring outside formal insolvency. The protective shield procedure under InsO §270b gives companies three months to prepare a plan without giving up control. Self-administration under §270 InsO allows operations to continue while restructuring runs. Austrian law has had ReO since 2021 as a functional counterpart to StaRUG.
In parallel, carve-outs have become more demanding from a regulatory standpoint. FDI screening regimes (BMWK in Germany, AußWG in Austria, the Swiss Investment Screening Act from 2025) require ex-ante review in critical sectors. Anyone selling an industrial holding to a buyer from a third country must reckon with a three-month clearance phase. That changes auction dynamics substantially.
For succession, the legal architecture is shaped by the German Inheritance and Gift Tax Act (ErbStG), the Valuation Act (BewG) and recent rulings of the Federal Fiscal Court (BFH) on the preferential treatment of business assets. Anyone structuring a succession without knowing the holding periods, the wage-sum rule and the 90 percent administrative-asset quota inflicts damage on the family that no valuation discussion can compensate for.
What we derive from this complexity
Tactical Management is not the investor who wins an orderly auction process. We are the investor who takes on the structured special situation. This self-positioning is not marketing. It is the consequence of three observations. First, substance return in the German Mittelstand has not disappeared. It has merely migrated into special situations. Second, regulatory complexity in DACH is rising faster than the structuring competence of most mid-cap funds. Third, permanent capital is the only capital structure that harmonises with the holding periods a real restructuring requires.
Marcus Köhnlein leads the operational side of this discipline at our firm. Dr. Tillmann Lauk coordinates legal and corporate-law structuring. Dr. Raphael Nagel conducts negotiations with owner families and insolvency administrators. This division of function is not coincidental. It is the answer to one observation. Special situations never fail on valuation. They fail on coordination.
The thesis. In the DACH Mittelstand, substance return from 2026 onward arises almost exclusively in special situations, and the source of return is not the entry price but the structuring discipline of the acquirer.
Articles in this cluster
Member articles are currently available in German only.
Distressed M&A · Timing as a yield source
Why entry timing into a distressed situation matters more than entry price. On StaRUG windows, the relationship with insolvency administrators and the mechanics of asset deals.
Carve-out as a craft
Corporate spin-offs rarely fail on price and almost always on operational decoupling. On Transition Service Agreements, IT separation and §613a BGB in practice.
Post-merger · The first 100 days
What is not decided in the first hundred days after closing will not be decided in the next ten years. On governance, personnel decisions and when silence is more productive than activism.
Founder buyout · Structures
From MBO via two-tier holdings to vendor financing. How founder exits can be structured in a fiscally and corporately sustainable way without endangering operational continuity.
Succession is not a valuation question
Family entrepreneurs do not sell their life's work to the highest bidder. They sell it to whomever they trust. On reputation capital and the logic of succession.
Related pillar pages
Pillar page curated by Dr. Raphael Nagel, founding partner. Tactical Management operates from Munich, Vienna and Baar (Zug).