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Consolidation as a Growth Strategy
Rising energy costs, digitalization, succession planning, the growing shortage of skilled workers, and intensifying competition are presenting many small and medium-sized enterprises with strategic challenges. In short—as in nearly all industries—the mood in Germany’s skilled trades and retail sectors is tense. To remain competitive in the long term, more and more businesses are opting for growth strategies that were previously common mainly in manufacturing and large corporations: mergers and acquisitions.
Smaller companies are emulating the strategies of larger firms and increasingly turning to M&A strategies. Under the motto “stronger together,” small and medium-sized skilled trades businesses are seizing the opportunity to secure their market position, leverage synergies, and expand their entrepreneurial scope. Mergers make it possible to pool resources and respond more quickly to market changes.
Skilled Labor Shortages and Business Succession as Drivers of Transactions
A key factor behind the growing importance of M&A in the skilled trades is the shortage of skilled workers. Numerous businesses struggle to find and retain qualified employees over the long term. Through targeted acquisitions, companies can not only expand their regional presence and workforce but also secure expertise that is already firmly established in the region.
Another aspect: the industry is facing a wave of retirements. According to the DIHK, at least 125,000 family-owned skilled trades businesses will need a successor between 2023 and 2028 alone. Where succession within the family is not possible, selling to strategic partners or investors opens up new opportunities. M&A transactions thus offer not only growth opportunities but also succession solutions.
Can “Buy and Build” Provide a Solution?
A striking example of this trend is the “buy-and-build” strategy employed by one of our Marktlink clients: the Dutch VDK Groep. The company strategically brings together medium-sized businesses under one international umbrella, thereby building a growing international network of independent companies.
By acquiring established businesses in various regions, the VDK Groep is able to systematically expand its market share. At the same time, the local identity and entrepreneurial freedom of the individual businesses are preserved. The group thus creates a model that intelligently combines expansion and independence.
For the VDK Groep, the buy-and-build strategy represents targeted market expansion. For the participating companies, this offers clear added value: succession plans can be implemented, synergies leveraged, and resources efficiently pooled. In practice, the companies benefit from economies of scale, access to new technologies and markets—without having to give up their autonomy.
How Can Transactions Be Executed Smoothly?
Careful preparation and experienced partners are crucial for an M&A strategy to succeed. In the SME sector, cultural fit, trust, and preserving the company’s identity play a particularly important role. Successful transactions are characterized by transparent communication, clear integration strategies, and a long-term perspective.
As M&A advisors, we support companies in identifying suitable partners, strategically preparing transactions, and ensuring a smooth implementation. This is particularly true for industries such as the skilled trades, where corporate culture and regional roots are key success factors.
Future Prospects for the Skilled Trades
M&A is no longer an exclusive tool of large corporations. Today, the motto is: grow instead of wait, because a strategically planned transaction opens up new growth opportunities—especially for skilled trades and retail businesses—whether through succession planning, gaining market share, or accessing new technologies.
The right partnerships are more important today than ever before; lone wolves have had their day. Well-thought-out buy-and-build strategies not only strengthen the competitiveness of individual businesses but also contribute to the consolidation of entire industries. For many skilled trades businesses, this is the key to ensuring long-term and successful continuity.
