Why is Thuringia an Attractive Location for Business Sales?
Thuringia, the green heart of Germany, has developed over recent decades into a dynamic economic hub offering specific advantages to business sellers. With a gross domestic product of €65.2 billion (2023) and solid growth of 2.4% compared to the previous year, the state demonstrates positive economic momentum. This upward trend creates a favorable environment for business sales and increases attractiveness for potential buyers.
Its central location in the heart of Germany, combined with excellent transport infrastructure, makes Thuringia an ideal base for companies with a supra-regional focus. The A4, A9, and A71 motorways, along with a well-developed rail network, provide optimal connections in all directions. These logistical advantages positively influence the valuation of Thuringian companies and enhance their appeal to prospective buyers.
A particular advantage is the extensive funding landscape that Thuringia offers as a structurally weaker region. Investors can benefit from attractive grant programs, making the acquisition of an existing business economically more appealing and potentially impacting sale prices positively. The Thuringian Development Bank provides specialized programs supporting business succession.
What is the Succession Situation in Thuringia’s SME Sector?
Thuringia’s SME sector comprises around 80,000 small and medium-sized enterprises, securing approximately 70% of all jobs in the Free State. According to surveys by the Thuringian Chamber of Industry and Commerce (IHK), about 5,500 of these companies face succession challenges within the next five years.
A unique aspect in Thuringia is the historically younger age structure of many companies. Numerous businesses were founded only after reunification, and the founding generation is now reaching retirement age. This leads to a wave of succession cases that will increase in the coming years, opening an important market for business buyers.
The average equity ratio of companies in Thuringia stands at 25.7%, providing a solid foundation for prospective acquirers. However, demographic trends, including the outmigration of younger, well-qualified professionals, pose challenges for finding family-internal or regional successors. At the same time, this creates opportunities for supra-regional or international buyers interested in taking over and developing proven business models.
Which Industries in Thuringia Are Particularly Sought After for Business Acquisitions?
Thuringia is characterized by a diversified economic structure, with certain sectors strongly represented and generating high demand in business acquisitions:
Mechanical engineering and the automotive supplier industry are traditional strengths of the Thuringian economy. Companies in this sector, especially those with specialized expertise and established customer relationships with major manufacturers, are highly sought after by strategic investors and often achieve above-average valuations in sales.
The optics and photonics industry, centered around Jena, forms an internationally significant cluster in Thuringia. Companies in this forward-looking sector with innovative products or patented processes attract particular interest from investors aiming to enter growth markets.
Medical technology and life sciences have become important economic sectors in Thuringia. Proximity to renowned research institutions and integration into regional networks make these companies attractive takeover targets for strategic buyers.
The food industry, closely linked to regional agriculture, represents a stable economic sector. Companies with established brands or specialty products often achieve attractive valuations during sales.
Thuringia has also established itself as an important location for renewable energy and environmental technology. Political support for the energy transition and societal trends toward sustainability provide stable future prospects, making these companies especially appealing to buyers.
How is the Value of a Thuringian Company Determined?
The valuation of a company in Thuringia generally follows established methods but takes regional specifics into account:
The income approach forecasts the company’s future earnings and discounts them to present value. In Thuringia, regional economic trends must be considered: companies in growth sectors such as optics, medical technology, or renewable energy may benefit from positive outlooks, while a more cautious forecast may be appropriate in other industries.
The multiplier method uses industry-specific factors multiplied by key figures like EBIT or EBITDA. In Thuringia, these multipliers vary significantly by sector: companies in optics/photonics or medical technology often receive EBITDA multiples between 5 and 8, whereas traditional craft businesses typically range between 3 and 5.
The asset-based approach considers the tangible value of all assets minus liabilities. This method is particularly important for asset-intensive companies, such as those in manufacturing or with valuable real estate.
For a sound valuation, consulting an experienced business appraiser familiar with regional market conditions is recommended. A professional valuation forms the basis for realistic price expectations and increases the chances of a successful sale.
What Support is Available to Sellers in Thuringia?
Thuringia offers a comprehensive network of support services for entrepreneurs looking to sell their business:
The Chambers of Industry and Commerce in Erfurt, Gera, and Suhl have dedicated succession advisors who assist with sales preparation. The "Thuringian Center for Start-ups and Entrepreneurship" (ThEx) offers extensive consulting and mediation services through its "ThEx Succession" program.
The Thuringian Chamber of Crafts has its own business advisors focusing on succession. They support business valuation and can connect sellers with suitable prospects from their network.
The Thuringian Development Bank provides specialized financing programs for business succession. The "Thuringia-Invest" program specifically supports investments related to succession and can enhance attractiveness for potential buyers.
The Thuringian Guarantee Bank and the Thuringian SME Investment Company offer guarantees and equity capital for succession financing, facilitating the sales process.
Specialized M&A advisors focusing on the Central German economic region possess valuable market knowledge and buyer networks. They can professionally guide the entire sales process and help achieve an optimal sale price.
Online platforms like viaductus complement traditional buyer search methods and increase the chances of finding the right successor for your business in Thuringia.
How to Optimize the Sales Process in Thuringia?
Selling a business in Thuringia follows a structured process that, with good preparation, leads to success:
The preparation phase should ideally begin 1–2 years before the planned sale. During this time, you can work on optimizing your business: cleaning up the balance sheet, improving profitability, clarifying legal issues, and documenting key processes and customer relationships.
Professionalism is essential when creating the sales documents. A compelling sales prospectus presents your company optimally and contains all relevant information for potential buyers. An anonymized short profile (teaser) serves as the initial contact point.
Buyer search is conducted discreetly and purposefully. In Thuringia, besides classic approaches like direct outreach to strategic investors, regional networks and events such as the "Thuringia Succession Exchange" are valuable. Due to demographic challenges, searching beyond the region for potential buyers is advisable.
After initial talks with interested buyers and signing a confidentiality agreement, the due diligence phase follows, during which the prospective buyer thoroughly examines your company.
In the negotiation phase, purchase price, payment terms, and transition arrangements are defined. Special attention should be given to the tax aspects of the transaction and the structuring of the purchase agreement.
A realistic timeframe for the entire sales process is usually 6 to 12 months. Professional support from M&A advisors, tax consultants, and lawyers can significantly ease this process.
What Tax Considerations Should Be Taken Into Account When Selling a Business in Thuringia?
Selling a business has significant tax implications that can be optimized through early planning:
In an asset deal, i.e., the sale of individual assets of the company, profits are generally subject to income tax. Under certain conditions, however, exemptions under § 16 EStG can be utilized, especially if the seller is over 55 years old.
In a share deal, i.e., the sale of company shares, tax treatment depends on the legal form. For corporations, the partial income procedure applies, under which 40% of capital gains may be tax-exempt.
Thuringia imposes one of the highest real estate transfer tax rates in Germany at 6.5%. This must be considered in real estate transactions within a business sale, for example, in manufacturing companies with their own operational properties.
Establishing a holding structure before the sale can offer tax advantages and should be examined in advance. The use of reinvestment options under § 6b EStG can also reduce tax burdens.
In family-internal transfers, special reliefs in inheritance and gift tax may apply. The transfer of business assets within the family can, under certain conditions, be largely tax-free.
Early consultation with specialized tax experts is essential to minimize tax liabilities when selling a business.
How Can Succession Search Succeed in Thuringia Despite Demographic Challenges?
Thuringia’s demographic situation, with the outmigration of younger skilled workers, presents particular challenges for business sellers but also offers specific solutions:
A supra-regional search for successors should be initiated early. Specialized mediation platforms and M&A advisors can provide valuable support by targeting interested parties from other federal states or abroad.
The "Thuringian Returnee Program" supports former residents who have gained professional experience elsewhere and wish to return home for business succession. This group combines regional ties with external expertise, making it an attractive option for sellers.
Cooperation with the state’s universities, especially Friedrich Schiller University Jena and Ilmenau University of Technology, can establish contacts with qualified graduates interested in entrepreneurship through business acquisition.
Attractiveness for supra-regional successors can be increased through targeted measures: highlighting the central location and excellent infrastructure, emphasizing relatively affordable residential and commercial real estate costs, and pointing out attractive funding opportunities for business takeovers.
A phased handover with an extended familiarization period can lower barriers for potential successors while ensuring knowledge transfer. Models such as temporary seller participation or advisory roles after the sale can enhance appeal to buyers.