Every day counts - Deutsche Beteiligungs AG

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If the seller is convinced, we’ve reached our first goal: the purchase contract seals the past months’ analyses and negotiations. The key thing now is to enhance the enterprise value: by sharpening the corporate profile, by add-on acquisitions or spin-offs. Or by innovative products or new market entries. That gets us off to a new start. Our next goal: building value, and, ultimately, profitably selling the enterprise in a few years.
MANAGEMENT’S REPORT I. Market development Overall, the private equity market declined slightly in financial year 2002/2003. Like last year, however, the decrease in investments by private equity companies relates to activities outside the market in which Deutsche Beteiligungs AG operates. Management buyouts again registered a distinct rise over the prior year. For the first three quarters of 2002, some 600 million euros were invested in management buyouts in Germany; for the first three quarters of 2003, the Bundesverband Deutscher Kapitalbeteiligungsgesellschaften/ German Venture Capital Association reported that its members had made investments of more than 850 million euros. This rise of more than one third reflects the transaction development in that market segment, on which the investment activity of Deutsche Beteiligungs AG is focused. In 2002, eleven management buyouts with a transaction value of between 50 million and 250 million euros (mid-market segment) were recorded in Germany. In the first nine months of 2003, there had been already twelve management buyouts; in the same time period the transaction value at this mid-market level increased to 1.8 billion euros, up from some 1.4 billion euros in 2002. Globally, 2003 saw a reversal of the trend in private equity investments, which has been negative in recent years. In 2001 and 2002, investments in both the United States and key European private equity markets had fallen in comparison to each of the prior years. The reasons were attributable to the sharp drop in venture capital activity that was not offset by the growth in buyout financing. Preliminary data based on the semiannual figures indicate that worldwide private equity investments in 2003 will finish ahead of those completed in 2002. This global market is valued at approximately 80 billion euros – many times more than the size of the market accessible to Deutsche Beteiligungs AG. An assessment of the market opportunities based on such global data does not do justice to the activities of Deutsche Beteiligungs AG. We anticipate that the uptrend registered in our market segment in 2003 will continue. In our view, the private equity business in Germany will be driven by these factors: 1. Fueled by capital market expectations, large corporations will intensify their focus on core businesses and part with peripheral activities. The large majority of management buyouts in 2003 originated from these sources. However, experience proves that financing aspects involved in disinvesting subsidiaries or individual business units are clearly gaining in significance. 2. Stock markets as a financing option are still only available to a very limited extent to high growth enterprises; this also holds true for disinvestments of existent holdings. The private equity market stands to profit from these supplementary investment opportunities: unsuccessful attempts to raise additional equity by selling parts of an enterprise through an initial public offering may end up in a complete sale of that company in a management buyout. Furthermore, management buyouts to a second generation of managers, or secondary buyouts, have gained in importance as an exit opportunity. Deutsche Beteiligungs AG · Annual Report 2002/2003 Management’s Report Negative trend appears to have bottomed out 61
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Annual Report 2002/2003 Every day c
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Deutsche Beteiligungs AG · Annual
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Deutsche Beteiligungs AG · Annual
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Wilken Freiherr von Hodenberg born
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Changes to the Board of Management
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November 1, 2002 to December 31, 20
Page 13 and 14: Shares of Deutsche Beteiligungs AG:
Page 15 and 16: Weak dollar curtails valuation rese
Page 17 and 18: Pro-active investor relations Deuts
Page 19 and 20: Prospects for our shares Capital ma
Page 21 and 22: For instance, the special accountin
Page 23 and 24: DEUTSCHE BETEILIGUNGS AG - MARKET P
Page 25 and 26: This performance is founded on six
Page 27 and 28: We build on an established network
Page 29 and 30: Platform for growth - Opportunities
Page 31 and 32: OUR PORTFOLIO - GOOD CROSS SECTION
Page 33 and 34: Volume November 1, 2002 € 313.1 m
Page 35 and 36: Deutsche Beteiligungs AG · Annual
Page 37 and 38: MANAGEMENT BUYOUTS - PARTNERSHIPS F
Page 45 and 46: Hochtemperatur Engineering GmbH Mai
Page 47 and 48: EXPANSION FINANCING - REACHING FOR
Page 49 and 50: Bauer AG Schrobenhausen Deutsche Be
Page 51 and 52: Hucke AG Lübbecke (through Bowa Be
Page 53 and 54: Otto Sauer Achsenfabrik Keilberg Be
Page 55 and 56: INTERNATIONAL BUYOUT FUNDS - BALANC
Page 57 and 58: Accessing opportunities in eastern
Page 59 and 60: Unternehmens Invest AG Vienna Deuts
Page 61 and 62: PORTFOLIO - BALANCED ACROSS INDUSTR
Page 63: Industrial profile of portfolio bal
Page 67 and 68: Investments during the year under r
Page 69 and 70: IV. 5. Appropriation of the distrib
Page 71 and 72: Our support for the development of
Page 73 and 74: IX. Events subsequent to the closin
Page 75 and 76: Liabilities and shareholders’ equ
Page 81 and 82: D. Accounting policies Deutsche Bet
Page 89 and 90: AUDITORS’ REPORT We have audited
Page 91 and 92: The financial statements of Deutsch
Page 95 and 96: Statutory offices Comparable office
Page 97 and 98: Statutory offices Comparable office
Page 99 and 100: MBO Multiples method Official Marke
Page 101 and 102: FIVE-YEAR FINANCIAL SUMMARY in mill
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