Law.com covered Covington’s representation of Pfisterer in Germany’s first IPO of 2025 and featured Henning Bloss and Jörn Hirschmann’s commentary on the current state of the German business climate and appetite for investment.
In light of the sluggishness of the IPO market and increase in delistings, Henning notes that “this trend of taking private will continue—it makes a lot of sense for private equity,”
Henning further noted that news of Germany’s €1 trillion defense and infrastructure spending bill is likely to boost the appetite for taking infrastructure-related companies public, particularly in energy infrastructure, which is undergoing structural change as it moves away from imported Russian gas and toward renewables. Henning added that businesses want to invest in “infrastructure generally and in particular all kinds of business services in connection with infrastructure. Investors don't like to invest [in] assets. They want to invest into businesses so that there is growth potential.”
Looking at the decrease in foreign direct investment, Henning commented, “Overall we have a problem in Europe that we are not attractive enough,” blaming the lack of a European Capital Markets Union, an initiative aiming to create a single market for capital within the EU. “Often it's also a question of liquidity of the stock market.” Henning also said he hopes that the German chancellor, former Mayer Brown counsel Friedrich Merz, will move toward a capital union although he’s not optimistic, he added, noting national governments are not keen to give up power.
Commenting on the difficulties faced by medium-sized companies going public, Jörn added that “generally it's a stretch for a Mittelstand [medium sized specialist manufacturing businesses often owned by families] company emerging from a family-owned company to a public company. Usually they really have to beef up their compliance and IR [investor relations’] staff and it's helpful to get an experienced [Chief Financial Officer] on board as well.”
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