Why are more and more medium-sized companies selling their business?

In Germany, there is currently a rise in the number of medium-sized lift manufacturers being taken over by large corporations. Are medium-sized companies under acute threat? What are the reasons? Why are such high sums being paid?

LIFTjournal asked Christian Steinigk about this. He is responsible for mergers and acquisitions at Schindler Germany.

More and more medium-sized lift companies are selling their businesses to corporations. Why?
Steinigk: There are several reasons for this: On the one hand, the bureaucratic burden in Germany has increased massively – keywords here are occupational safety, data protection, IT security and legal requirements such as the Supply Chain Due Diligence Act or the Deforestation Ordinance. For medium-sized companies, this is almost impossible to manage without external effort and costs. This limits their focus on their core business. And they need specialised personnel, who are expensive.

Secondly, the economic environment has become more difficult. The new lift business in particular has suffered greatly, which was the main source of income for many companies. When growth stagnates, profit margins shrink, price pressure increases, and many SMEs can no longer invest in new technologies or training to the same extent.

Thirdly, the shortage of skilled workers is becoming more acute. Not only are technicians hard to find, but training is also often a problem for smaller companies. This leads to a vicious circle because growth and innovation are hardly possible without skilled workers.

Demographic change is also repeatedly cited as one of the causes...
Steinigk: Demographic change is having a very clear impact here. Many entrepreneurs of the so-called baby boomer generation have now reached an age where they need to find a successor for their business. However, a suitable successor is often not in sight – neither within the family nor in the company itself. This leads some to consider selling the business.

“Maintenance contracts are a stable source of income and offer long-term planning reliability. That is important for us. But the strategic orientation of a company is also of great significance.”

Christian Steinigk

One reason for the acquisitions is the high margins on maintenance contracts – what role do they play in the purchase?
Steinigk: Maintenance contracts are a stable source of income and offer long-term predictability. That is important to us. But the strategic orientation of a company is also of great importance. We examine the business model, regional coverage and product portfolio. We also acquire companies with niche or specialised products in order to better serve customer needs and expand our range.

It is said that corporations acquire medium-sized companies not only because of the maintenance contracts, but also because of the qualified employees who specialise in modernisation. What role does this play?
Steinigk: A major role. We invest heavily so that our companies in the German lift association can benefit from excellently trained and motivated specialists. That is why we specifically acquire companies with well-qualified personnel whom we can develop further. They are our greatest asset and an important pillar for ensuring quality and innovative strength.

Sales prices in the lift industry are extremely high compared to other industries. Why is that?
Steinigk: Every price we pay for acquisitions is based on a thorough analysis and a business plan that shows that we can justify the purchase price economically. So we don't pay inflated prices; instead, we focus on realism. Lift companies have a stable and future-oriented business model. Maintenance and modernisation create a recurring revenue stream that is attractive. One thing is clear: the lift industry is interesting, and this is reflected in the price.

How much independence do the acquired companies retain?
Steinigk: Their independence and identity are retained. Each company continues to have its own products, suppliers and technologies. At the same time, we utilise our group purchasing power and the synergies that result from it. Regional proximity is extremely important, because customers often want precisely this personal connection.

How do you support the companies after the purchase? Are you or your employees on site more often?
Steinigk: After the acquisition, integration managers accompany the organisational transition, e.g. insurance companies, banks, and introduce our high Schindler standards for occupational safety, compliance and data protection – in the interests of the employees and to secure our market position, without restricting flexibility. I regularly visit the companies on site to accompany the transition. Good, personal support is also important to us here.

There are rumours circulating about cuts in allowances or Christmas bonuses in acquired companies – is that true?
Steinigk: No, that is not the case. Employees are taken on under existing conditions. Their motivation and loyalty are very important to us. Across-the-board cuts would contradict this goal and will not happen at our company.

Isn't there a risk of an oligopoly due to the high number of sales?
Steinigk: We hear that a lot, but I don't see it that way. The market is vibrant, and there are always numerous new companies and start-ups establishing themselves. Of course, part of the industry is consolidating – that's the case in almost all industries. And we are also consciously preserving small and medium-sized businesses by maintaining the independence of the companies we acquire and promoting diversity and innovation. Since 2016, we have been integrating the companies we have acquired into the “Aufzugsverbund Deutschland” (German Lift Association). In this way, we are pooling their strengths without standardising them. This preserves different fields of technology, regional offerings and customer relationships.

Do small and medium-sized enterprises still have a future?
Steinigk: That is a joint task for market participants and politicians. We need framework conditions that reduce bureaucratic burdens and secure skilled workers in the long term. For us as a group, small and medium-sized enterprises are essential because they complement our offering and operate close to customers on a regional basis.

What has changed in the Federal Cartel Office's approach to sales – the takeover of the company ‘Butz & Neumair’ was obviously a difficult birth...
Steinigk: My impression is that neither the approach nor the intensity of the review has changed, and the Federal Cartel Office's approval does not allow any conclusions to be drawn in this regard. The decisions regarding Butz & Neumair were examined objectively and are based on legal criteria. Although there were delays in the administrative process, the approval was ultimately granted quickly and without conditions.

The owners can choose between four companies. Why should a medium-sized company sell to Schindler?
Steinigk: We have a clear strategy: companies should retain their identity within the lift group and continue to operate under their own name. This is very important to us, the sellers and their employees. We accompany the entire sales process in partnership with our own small and experienced M&A team. We are aware that a sale is always a very emotional step, as it involves handing over a lifetime's work. That's why we always provide a high level of trust and personal support. We value long-term prospects for the company and its employees.

What criteria do you use to select companies?
Steinigk: We don't select companies; owners contact us or consultants. And they decide whether to place their company in our hands. Of course, we pay attention to the strategic fit: regional presence, market segments and the product portfolio are crucial. The size of the company also plays a role, as does its reputation in the industry and, last but not least, the qualifications of its employees. The company should complement the existing portfolio in a meaningful way and provide access to new markets or customer groups.

How many companies have you integrated into the lift association over the last ten years?
Steinigk: Since 2016, we have added 24 companies to our lift association. These continue to operate independently under their own names. In addition, there are smaller companies that we have acquired as so-called asset deals.

The interview was conducted by Ulrike Lotze and Bernd Lorenz.



More information: About the person: Christian Steinigk, 55, began his career at Schindler in 1993 as a service technician and new installation engineer. He has now been with Schindler for over 30 years, holding various operational positions in the areas of service, modernisation and new installations. Since 2024, he has been Head of M&A (Mergers & Acquisitions) at Schindler Germany.

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