Brief analysis

Fire protection: a growing market with low downturn risk and attractive margins

Not least due to the political goal of climate neutrality, technical building equipment (TGA) is now more than ever a popular field of investment for private equity in the areas of heating, ventilation systems and electrical installations. Fire protection is a sub-sector of technical building services that is usually less experienced by investors and is also less prominent in the public eye. Wrongly so, in our opinion, as numerous key figures as well as successful takeovers and value creation stories by investors in recent years prove the attractiveness of this sector. Technical fire protection in particular, which deals with the prevention and active combating of fires and is therefore more technologically complex than passive fire protection, for example, is worth a closer look.

The market value for technical fire protection in Germany is around € 5.1 billion and is growing sustainably, driven by an increasing proportion of large-scale new construction and renovation projects (and the associated higher penetration rate for fire protection), stricter requirements and regulations and continued high demand in the non-residential construction segment.
 
At the same time, it is becoming more difficult for new competitors to enter the market due to the required certifications, the prevailing shortage of skilled labour and increasing demand for integrated products and services. This mixed situation allows market participants on the manufacturer side to achieve EBITDA margins of more than 11% on average. With a view to exit scenarios, multiples of up to x10 have also been achieved in the past.
 
Due to these promising conditions, buy & build concepts, digitalisation and internationalisation offer potential to generate further growth in terms of both sales and profitability. Some investors have already recognised these opportunities for themselves. As the prevailing professionalisation and consolidation continues and requires capital, the technical fire protection sector should now be on the radar of private equity at the latest.

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Patrick Seidler
Patrick SeidlerManaging Partner

Patrick is a founding partner of S&B Strategy GmbH and is responsible for the M&A division.

With over 12 years of experience as a managing director, consultant and manager focussing on corporate and investor acquisitions, he is a proven expert in M&A – both for buy- and sell-side mandates. Patrick gained extensive experience in the deals division of PwC, on the management board of Hubert Burda Media and in the context of M&A and strategy projects for national and international clients in Europe and Asia. Patrick completed his Master’s degree in Business Administration at the Amsterdam Business School.