Consolidation of Craft Businesses in Germany

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August 12, 2024

by an investor from University of Oxford in Hamburg, Germany

Hello everyone!

I'm currently exploring an investment thesis around rolling-up/consolidating craft/tradesman business ("Handwerksbetriebe") in Germany. I'm particularly looking at roofing at the moment, but other areas might be interesting as well.

Did anyone from the DACH region explore similar thoughts yet? What have you come up with? I'd be glad to have a chat and exchange further on this.

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Reply by a searcher
from Technische Universität Berlin in Bern, Switzerland
Really interesting thought. Historically, craft businesses have been quite fragmented in Germany. In my opinion, however, it seems to have become clear in recent years that this is not necessarily a reaction to economic conditions, but rather a preference on the part of business owners - see the success of montamo, for example.

Particularly in view of the ever-increasing pressure due to the shortage of skilled workers, I see immense economies of scale, (almost) irrespective of the trade sector, especially in the area of process optimisation (quotation -> purchasing -> implementation -> acceptance), but also in the division of work steps: What really needs to be done by a professional, fully semi-skilled master craftsman vs. what can be done by semi-skilled labour or labourers from other trades
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Reply by a searcher
from Frankfurt School of Finance & Management gGmbH in Frankfurt am Main, Deutschland
Hi Florian, interesting thought, there have been some consolidations in plumping emergency service and key service. Also Gardening had some. A friend recently attempted to sell his joining and wood working company but it's hard sell and hence the multiples are low to nonexistent if you find a buyer at all. Which might present a good opportunity if you have a idea how to manage and ensure utilisation.

On nexxtchange you can find a lot albeit I can't say anything about roofing.
Although it's not my industry and i don't have much more knowledge on hand I am happy to act as sounding board.

Regards Jochen
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