Already clear, in the lockdowns of the most difficult Corona time, more people longed for a pet.

And that's why they needed more pet food and accessories: the scratching post for the cat, a basket for the dog, internal filters for the aquarium.

And yes, as a result of Corona, consumers generally made more of their purchases on the Internet, why not also those for their pets?

Both factors that suit the online pet supplies retailer Zooplus.

So if the share cost around 80 euros at the beginning of 2020, it seems plausible that it is now trading well above this price.

Klaus Max Smolka

Editor in business.

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But 480 euros? Six times as much? At least that's how much the paper is now worth after the two affiliates Hellman & Friedman (H&F) and EQT discovered the Munich online retailer for themselves. In August, H&F opened the wrestling match for Zooplus, which also had something unfamiliar in store for private equity professionals. The Americans initially offered 390 euros per share and called the competitors KKR and EQT on the scene. Zooplus talked to everyone, the bidders whipped each other up. In the last step, EQT and H&F joined forces and are now putting the 480 euros on the table, corresponding to a transaction value of 3.7 billion euros.

The business is special in three ways: firstly, because of the high “premium”, because the level is 85 percent above the average price for the three-month period before the first takeover plans were made public. Second, it is unusual for two rivals in an ongoing bidding process to join forces in order to secure the transaction. “Club deals” - that is, a takeover by two or more private equity companies - are often seen in the billions.

It is rare, however, that two parties come together who have just outbid each other in the same transaction.

For something comparable, one has to go back to 2007, when Macquarie and BC Partners first bid against each other individually for the heating cost calculator Techem and then jointly - but in the end they failed because of the desired majority quota.

Thirdly, what makes the Zooplus case special: Contrary to the usual business model, the investment companies pay entirely from their own resources and do not take out any outside capital.

Public takeovers are becoming more popular

These are all signs of how hot the private equity market has been.

And so there is a lot to talk about when investment professionals and their financiers come together in Berlin for the SuperReturn leading conference;

This Tuesday starts with some special “summits”, such as the “German Private Equity Summit”.

The “dry powder” - the capital pledged by investors - rises and rises: depending on the survey, the sum is put at a high three-digit billion dollar amount or a trillion value globally.

This increases the pressure to invest; there no longer seem to be enough companies in which the private equity firms can invest.

The willingness to bid for listed companies is also increasing, which in Germany is complicated under takeover law.

“It took a long time for private equity firms to venture into public takeovers again,” says Berthold Fürst, co-head of global mergers and acquisitions (M&A) at Deutsche Bank: “That is Expression of transaction pressure, but also the self-confidence to dare to tackle complex transaction structures again. "

Record sums despite Corona

Financial investors make a significant contribution to the boom in the general M&A business. The latter will reach a record level this year, that has already been decided. Because the total global volume of this year has recently exceeded the total value of the previous record year 2007 - namely 4.6 trillion dollars. This has been determined by the statistics service provider Dealogic. In the years 2010 to 2020, the share of private equity was 25 percent.

In the course of the year so far, it is more than a third, namely 35 percent, as the investment bank J. P. Morgan calculates. "Private equity is playing an increasingly influential role in the global M&A business," says her M&A boss in German-speaking countries, Patrik Czornik. According to Dealogic's calculation, fees for investment banks are likely to rise globally by a quarter this year and also exceed the 100 billion mark in euros.

The investment companies set up funds of ever increasing volumes. Hellman & Friedman and CVC raised more than $ 20 billion each for individual new pots, and KKR put it together to $ 59 billion in the second quarter. After all, the increase in relative purchase prices (“multiples”) is not a sure-fire success: In the third quarter, they averaged 11.3 for European medium-sized companies in relation to operating profit (Ebitda), well below the 12.9 of the second quarter. This is what the private equity firm Argos calculated. It cites the reason that the number of transactions in sectors such as health and technology, which are traditionally valued higher anyway, normalized after a special boom: "Nevertheless, the multiples are still at a high level."

The private equity industry only suffered a brief dent from Corona: a few weeks of paralysis in spring 2020. Shortly afterwards, the almost limitless liquidity secured business again.

The only victim was the SuperReturn in February of this year, because it had to be postponed, and in the end three times.

But for the catch-up date, the congress is now sold out: 2000 participants have announced themselves - the organizer did not allow more.