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Die M&amp;A REVIEW wurde 1990 von Prof. Dr. Günter Müller-Stewens ins Leben gerufen und von 1992 bis 2016 vom Institut für Betriebswirtschaft (IfB) an der Universität St. Gallen betreut. Heute sind Prof. Dr. Florian Bauer und Prof. Dr. Christoph Schalast die Herausgeber. Das Magazin liefert monatlich Fachbeiträge zu Unternehmensübernahmen und Fusionen im deutschsprachigen Raum und international. Sie bietet einen Überblick über aktuelle M&amp;A-Trends, erfolgte Transaktionen und beteiligte Interessengruppen wie Käufer, Verkäufer, Berater und Intermediäre. Die Themen umfassen praxisrelevante Fragestellungen entlang des gesamten M&amp;A-Prozesses, Analysen von Verflechtungsstrukturen einzelner Konzerne und Branchen, statistische Auswertungen, Länderanalysen sowie juristische und steuerrechtliche Beiträge.

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Leo Berthier

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Andre Waßmann, Mitglied der Geschäftsleitung und Head of M&amp;A | Corporate Finance bei Helbling Business Advisors, verfügt über mehr als 20 Jahre Erfahrung in Unternehmensstrategie und Investmentbanking mit Schwerpunkt M&amp;A und Corporate-Finance-Transaktionen. Er unterstützt seine Kunden bei der Trans-formation entlang von Megatrends durch Akquisitionen, Verkäufe und Finan-zierungen. Seine Expertise im Zusammenhang mit der Transformation zu mehr Nachhaltigkeit und ESG, Green Financing und Digitalisierung wird von Kunden und Medien gleichermaßen nachgefragt. Durch seine Erfahrung in verschiedenen Positionen u. a. bei Accenture, der Commerzbank, dem Investmenthaus KGAL und Clarfield International verfügt Andre Waßmann über ein exzellentes Banken-Knowhow und Kapitalmarktverständnis und einen breiten Branchenzugang.

Andre Waßmann

Patrick Süß, Manager – M&amp;A at Helbling Business Advisors, has more than five years of experience in the areas of (distressed) M&amp;A and corporate finance. He has worked on several M&amp;A transactions along the entire M&amp;A process with a focus on special situations. His transaction expertise and experience lies in industries, including robotics, plant engineering, recycling as well as special metals.

Patrick Süß

Hissan Usmani, Senior Consultant – M&amp;A at Helbling Business Advisors, has more than four years of experience in the areas of investment banking, corporate finance and venture capital. He has worked on M&amp;A transactions, fund raisings and early-stage startup investments into SaaS, FinTech, InsurTech, HealthTech and DeepTech. His expertise and experience lie in industries, including engineering, robotics, software, and IT.

Hissan Usmani

<h3>1. Introduction: The industrial robotics revolution1</h3>The selection to conduct a market analysis and research on the robotics industry in Germany and Europe was driven by current challenging factors. The current machinery industry is challenged by changing framework conditions and success factors which significantly influence future developments for the overall industry.The push towards digital evolution plays a vital role in changing framework as the future of the German and European engineering industry is heavily dependent upon their ability to transform from product to solution providers. Also, the combination of ecological and economic goals where climate policy measures force integration of a sustainability level into business model considerations and represent an additional success factor for companies to find greener and more cost-effective and efficient approaches.Another key challenge for the overall industry is the increasing international competition. The industrial strategy ”Made in China 2025” challenges quality and innovation leadership of German and European machinery manufacturers and increases margin pressure due to decreasing technological differentiation. Lastly, maintaining competitiveness through regulated succession. With an approximate 14% of SMEs in R&amp;D-intensive manufacturing are aiming for succession by 2025. The implementation of regulated succession solutions for SMEs in the mechanical engineering sector is important for maintaining future competitiveness.Based on the above-mentioned challenges for the machinery industry, we identified five key technology building blocks for continued competitiveness and future business models. These technology trends are Automation and Robotics, Advanced Sensor Technology, Artificial Intelligence, Energy Efficient Technologies, and Augmented Reality. For this article we focus on the first technology block of Automation and Robotics.The period 2018 until 2023 witnessed pivotal shifts that had a unique impact on the Robotics space with increas-ing and ongoing pressure on European mid-market companies to drive automation initiatives to mitigate increasing personnel costs and personnel shortage as well as an increasing competition from Asia. These factors also represent the overarching drivers of Robotics M&amp;A activities.Moreover, the lingering effects of the COVID-19 pandemic accelerated the adoption of automation technologies as companies sought ways to maintain operations while adhering to social distancing measures and tried to bring crucial steps in the value chain back to its original manufacturing locations.<h3>2. Industrial automation and robotics landscape2</h3>The robotics and automation landscape is witnessing impressive growth. As highlighted by Frank Konrad, the VMDA Chairman, projections indicate sales could touch €16.2 billion by 2023 in Germany. This aligns with our own market research concerning the machinery sector in both Germany and Europe. Consequently, our M&amp;A insights in this edition spotlight ”Industrial Automation and Robotics”.The global robotics market was valued close to €70 billion in 2022, and anticipations are for it to grow at a robust CAGR of 14.7% until 2032. Factors propelling this sector encompass the rise of E-Commerce, skilled labor deficits, advancements on the Internet of Things (IoT) and Artificial Intelligence (AI), and the automotive industry‘s dynamic shifts.From 2018 up until Q3 2023, over 200 M&amp;A transactions occurred involving European robotics firms with an aggregated deal value of €7,085 million. The vigor in M&amp;A activity and the noteworthy valuation rates indicate a seller-favorable market, with sustained engagement from both niche and broad-base investors.This domain is also increasingly overlapping with sectors such as IT &amp; Software, Healthcare, and Logistics, prompting M&amp;A strategies that bolster cross-industry synergies. Given the vibrant deal environment, encouraging market metrics, and diverse growth catalysts, the Robotics domain stands as a compelling area for industrial companies to modernize and amplify their automation efforts. Considering this, we foresee the continued momentum in the Robotics M&amp;A sector, especially for mid-sized businesses, centering on integrative strategies, technological augmentations, and cross-industry collaborations.<h3>3. Emergence of industrial robotics:</h3>As the global shift towards digital technologies continues, Industrial Robotics is emerging as a key industry fueling the Industrial revolution 4.0. Industrial robots play a pivotal role in sectors such as automotive, healthcare, aerospace, manufacturing, electronics, construction, semi-conductors. In these settings, robots are automating tasks from welding to assembly, thereby increasing efficiency, safety, and scalability, and decreas-ing unit costs of production.During our research we analyzed a large number of robotics companies to better understand their market trading and growth multiples and key drivers for the growth. Below is the snapshot of global companies in industrial robotics space and some selected companies to give an idea on the trading multiples.The robotics industry has showcased a stable trajectory, with companies experiencing an average annual sales growth rate (CAGR) of 5.6% over the past six years. Interestingly, while the EBITDA margin for 2022 was robust at an average of 18.0% and expected to grow to an average of 18.3% in 2023, it‘s evident that a few players in the sector had significantly high margins, driving this average up.Companies, on average, are set to channel more of their sales back into the business as capital expenditures, with the percentage rising from 3.1% in 2022 to an anticipated 3.4% in 2023. This uptick in investment might be in response to technological advancements, ambitious expansion plans, or infrastructure modernization. Yet, a point of consideration is the slight dip expected in the average profitability after accounting for these investments, moving from 14.6% in 2022 to 14.1% in 2023. In essence, the robotics sector is clearly in a phase of growth and expansion, but the immediate profitability post these increased investments could face slight pressures in the near term.In evaluating prominent companies based on trading multiples and other performance indicators, Fanuc Corporation emerges with a promising revenue up-swing post-2021, a commendable EBITDA margin of 32.5% in 2022 and with a revenue growth in 2023. The primary drivers behind Fanuc‘s revenue increase come from a dynamic shift in the global Electric Vehicle (EV) market, which has created a significant demand for robots in EV body and battery production. Alongside this, the changing landscape of automobile manufacturing offers opportunities for robotics in areas such as high-precision mold manufacturing and final assembly. Additionally, their strategic positioning in various markets and a focus on total ownership cost have been pivotal in maintaining strong sales and revenue streams.Teradyne, Inc. distinguishes itself with high valuation multiples, notably a 5.23x EV/Rev for 2023E and an impressive EV/EBITDA of 21.0x. Teradyne‘s revenue growth over recent years has been driven by its strategic alignment with two major global megatrends: pervasive electronics and the rise of easy-to-deploy industrial robots. While the company‘s products and engineering investments are perfectly poised to tap into these trends, their flexible operating model ensures resilience against broad market fluctuations. Additionally, Teradyne‘s continued investment in R&amp;D and expansion of its Robotics distribution network has fortified its position in the market.Meanwhile, KION GROUP AG showcases consistent revenue growth, complemented by a robust 7.5% CAGR over the past years. This growth has been fueled by KION Group AG focus on innovation through partnerships with companies such as ifesca GmbH for AI-driven energy management, showing their dedication to efficient and sustainable operations. Meanwhile diversifying into hydrogen drive systems while producing proprietary fuel-cell systems offers them a competitive edge in the European market. Also, KION Group possess a strong focus on investments globally into markets in Germany, China, and North America. For example, investing around €60 million in Kahl am Main for a premium facility, the Kahl Regional Distribution Center, set to begin in 2025, and €30 million in Aschaffenburg to reorganize Linde Material Handling logistics. Their future-focused ”KION 2027” strategy emphasizes sectors such as sustainability and digital solutions, poised for future growth.Fig. 1 • Selection of major global robotics and automation companies
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.1_.jpg" alt=Fig. 1 • Selection of major global robotics and automation companies decoding="async" loading="lazy" />
 
Source: Capital IQ, Helbling ResearchFig. 2 • Operating statistics of selected peer group
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.2_-01-01.jpg" alt=Fig. 2 • Operating statistics of selected peer group decoding="async" loading="lazy" />
 
Fig. 2 • Operating statistics of selected peer groupSource: Capital IQFig. 3 • Selected companies for market valuation snapshot
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.3_.jpg" alt=Fig. 3 • Selected companies for market valuation snapshot decoding="async" loading="lazy" />
 
Source: Annual reports (2020 – 2023), Capital IQFig. 4 • Robotics - M&amp;A quarterly deal count
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.4_-01.jpg" alt=Fig. 4 • Robotics - M&amp;A quarterly deal count decoding="async" loading="lazy" />
 
Source: Mergermarket (2018 – Q3 2023)<h3>4. Robotics M&amp;A deal count: A closer look3</h3>The robotics industries past developments can be explained through its M&amp;A activities. Each year presented its set of challenges and opportunities, and in general the M&amp;A market mirror these nuances well.In 2018, the industry was still in an exploratory phase, with businesses keen on understanding the landscape and venture capitalists providing early stage fundings for innovative yet unproven robotics start-ups (e.g., Series a funding of Magazino GmbH, a robotics company focused on warehouse and intralogistics). The deals made were foundational, ensuring businesses had the robotic infrastructure in place to enable sophisticated automation products (e.g. Teradynes acquisition of Mobile Industrial Robots, a leader of collaborative autonomous mobile robots for industrial applications).As 2019 rolled in, there was a clearer vision with leads to more specialized acquisitions. Whether it was AI-driven solutions for better customer service or automated machinery for faster production, the year saw a surge in niche acquisitions. Notable, the Carl Cloos Schweißtechnik GmbH acquisition, Germany-based company engaged in manufacture of arc welding and robot technology which was acquired by China Renaissance Capital for €196m.2020 and the pandemic brought uncertainties, but that also accelerated the inevitable shift towards automation. M&amp;A activities reflected this rush, with businesses vying for the best in robotic solutions to stay relevant. Switzerland-based provider of automation technology, including robots and cloud-native software for liquid handling, Andrew Alliance SA was acquired by Waters Corporation for a deal value of €71m to broaden advanced robotics and software to support customers across pharmaceuticals, life sciences and materials science markets.By 2021 and 2022, the M&amp;A landscape was not just about survival, but also about leadership. The acquisitions made during these years were strategic, ensuring a competitive edge. The acquisition of Ritter GmbH, a Germany-based manufacturer of high-quality robotic and liquid handling consumables from conductive tips engineered to exacting standards, by Avantor Inc in 2021 for a deal value of €1,190m and the acquisition of 5% stake in KUKA AG, German robotics company engaged in industrial automation by Midea Group Co., Ltd. for a deal value of €151m, show an ongoing strengthening of the Robotics industry and technology.<h3>5. Target country spotlight: Europe‘s robotic leaders4</h3>Germany was leading with the most number of deals in Europe. Responsible for 33% of all transactions in the past six years, Germany proved its strength in industrial automation, medical technology, manufacturing, and more. The acquisition of Ritter GmbH by Avantor Inc., a deal worth €1,190m, served as a testament to Germany’s dominance in the field.France, though behind Germany, was no less impactful. The country‘s focus spanned across various robotics niches – from surgical robotics to industrial automation. Their diverse M&amp;A activities painted a picture of a nation keen on exploring the entirety of what robotics had to offer.Switzerland, with its historical prowess in precision mechanics, found its footing in specialized robotics. The interests of Swiss companies were evident in their funding rounds, with firms like ANYbotics (raising €46m in a series B round) and ecoRobotix (raising €48m in funding round) making waves.Italy, Denmark, and Spain, while not at the very forefront, showcased steady growth and strategic foresight in their M&amp;A activities. Their focus ranged from industrial machinery to consumer-friendly robots, signaling a comprehensive approach to the robotics domain.Fig. 5 • M&amp;A deal count split by target country in Europe (2018 - Q3 2023)
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.5_-01-01-01.jpg" alt=Fig. 5 • M&amp;A deal count split by target country in Europe (2018 - Q3 2023) decoding="async" loading="lazy" />
 
Source: Mergermarket<h3>6. Delving into deal values: Big and small, every deal matters5</h3>The robotic and automation M&amp;A landscape between past six years showcased a broad spectrum of deal values, each telling its unique story. The industry saw a significant development from emerging technological players with groundbreaking innovations into the small-cap space. The number of deals (€ &lt; 20m) resulted in overall 51% of the total deals in past six years. Mid-cap deals, specifically those ranging between €20m up to €250m, contributed in total 42% of all the transactions. Yet, their aggregated deal value was impressive at €2,500m. These numbers reflect a strong strategic interest in mid-market companies, and leading ways for these companies in becoming potential future leaders in the robotics and automation domain.The large-cap deals, valued above €250m, were few but monumental. These deals alone added up to €4,250m to the deal values. These large-cap transactions resulted in an extraordinary 60% of the total deal value of €7,085m emphasizing that while large deals are less frequent, they play a substantial role in shaping the robotics industries landscape.Fig. 6 • M&amp;A deal count split by deal value in Europe (2018 - Q3 2023)
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.6_-01.jpg" alt=Fig. 6 • M&amp;A deal count split by deal value in Europe (2018 - Q3 2023) decoding="async" loading="lazy" />
 
Source: MergermarketFig. 7 • M&amp;A deal count split by investor type in Europe
 <img class="c-image inline not-prose" src="https://cms.manda.co/storage/ma-review/2023/11/Helbling_Abb.7_-01-01.jpg" alt=Fig. 7 • M&amp;A deal count split by investor type in Europe decoding="async" loading="lazy" />
 
Source: Mergermarket, Helbling Research<h3>7. Investor Insights: Strategic vs. Financial Investors6</h3>The strategic investors in robotics M&amp;A showed cyclical trends, peaking at 30 deals in 2021 and 31 deals in 2022 after an initial surge in 2018 and a dip in 2019. Financial investors started cautiously but have shown increasing interest in robotics companies, reaching 20 deals by 2021 and with 21 deals in 2022. By 2023 (1st September), financial investors passed strategics in terms of deal count with 18 vs. 10 deals, respectively. This suggests that strategic investors might be aligned with technology adoption cycles, while financial investors show a steadily growing confidence with a current focus on adding technology capabilities as well as an increased later-stage funding activity by venture capital funds in 2023. The convergence in 2023 indicates a new phase of balanced, competitive investment in the robotics sector.<h3>8. Conclusion: Looking beyond 2023</h3>The last six years have been transformative for Europe‘s robotics industry. The M&amp;A activities have not only shaped the business landscape but also charted the path for future innovations. While the past gives us data and insights, the future promises unprecedented possibilities.Industrial robotics industry landscape has been on the growth trajectory over the past years and M&amp;A activities are on the rise, especially post-Covid-19. More strategic and financial investors are entering the space.For financial investors, such as private equity and later stage venture capital investors, the period from 2018 to 2023 showed a higher participation with focus on significant stakes in robotic companies. We predict the same happening in coming years which would be fueled by the global machinery industry push towards digital automation and robotics. Higher number of later stage funding rounds also indicate a growing PE/VC exits and higher consolidation opportunities in the coming years. PE and VC investors will eventually go for exits of their portfolios which further strengthens the strategic goals of machinery industry players.

Furthermore, as robotic technology is maturing day by day and permeates even more sectors, the M&amp;A landscape will become essential, and we will presume strategic deals where targets are PE/VC backed companies and acquirers are traditional players. Higher number of SMEs and hidden champions will enter the acquisition space of robotic companies for automation as they need much higher competitive advantage to stay technologically relevant considering the growing pressure on cost cutting, digitalization and strong global competition where countries such as China and Japan are playing on the price points. <hr>1 Data sources: Capital IQ and Mergermarket | Target Country/Region: Europe | Target Subsector: Robotics | Period: 01.01.2018-01.09.20232 Data sources: Capital IQ, Mergermarket, HBA Research3 Data source: Mergermarket (2018 – Q3 2023)4 Data source: Mergermarket (2018 – Q3 2023)5 Data source: Mergermarket (2018 – Q3 2023)6 Data source: Mergermarket (2018 – Q3 2023)

Driven by challenging factors, a market analysis on the robotics industry in Germany and Europe is conducted. Changing framework conditions and success factors in the machinery industry influence future developments.

Industrial automation and robotics: A European M&A perspective

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