Sector
Succession in manufacturing: buying and selling a manufacturer or supplier
Small manufacturers and suppliers are the most popular choice among successors. Yet many handovers still fail on capital needs and technical know-how.
As of October 2026 · An overview, not legal or tax advice.
In short
According to the DIHK's 2025 report, 32 per cent of people interested in a takeover are looking for a manufacturing business, more than in any other sector. The ratio of supply to demand is 1.3, relatively balanced.
A good match rarely happens by itself, though: machinery and buildings drive the price, running the business needs technical knowledge, and many suppliers depend on a few customers.
- 01
In demand, but demanding
The chambers name several reasons why handovers in manufacturing still stall: uncertainty on world markets, for example from tariffs and supply bottlenecks, high energy costs and the investment digitalisation needs.
On top of that, many structures are built around the current owner. If a succession fails, a whole stage of the supply chain can disappear, and know-how is lost.
- 02
Three routes to succession
A business can stay in the family, pass to employees or be sold to an outsider.
Succession routes compared Route Strengths and hurdles Within the family Trust and continuity. Hurdles: family expectations, a fair deal for siblings, often limited funds. To employees (management buy-out) Knows the business, team and customers. Hurdles: little equity, the shift from colleague to boss. To an outsider (sale or management buy-in) Fresh ideas and usually a fair market price. Hurdles: the search takes time, team and customers need to build trust. According to KfW's succession monitor, most Mittelstand owners would prefer a family solution, followed by a sale to outsiders. Management buy-outs have recently been planned more often again.
KfW succession monitor 2025, PDF (in German) · Glossary: management buy-in
- 03
Buying a manufacturer: how to go about it
A takeover has no fixed timetable, but these steps almost always come up:
- 01Decide which kind of manufacturer or supplier, region and size suit you
- 02Search: the nexxt-change marketplace, chamber of commerce succession advice, tax advisers, banks and personal contacts
- 03First meeting with the owner, then a confidentiality agreement and documents
- 04Due diligence: customer concentration, machinery, certifications, energy costs and technical know-how in the team
- 05Negotiate value and price, arrange financing with your bank, KfW and a guarantee bank
- 06Purchase agreement, informing employees under § 613a of the Civil Code, a shared transition period
nexxt-change marketplace (in German) · § 613a BGB (in German)
- 04
Selling a manufacturer: preparing the handover
Succession works when not only the successor is prepared, but the business too. These steps help:
- 01Set your goal and timeframe: when do you want to stop, and what matters to you besides the price?
- 02Make the business less dependent on you: second contacts, written processes
- 03Build a technical lead in the team and talk to the main customers early
- 04Put the figures in order and have the value assessed realistically
- 05Look for successors discreetly, with a short, anonymous business profile
- 06Involve your tax adviser early, for example on allowances and the timing of the sale
- 05
What is the business worth?
Small and mid-sized businesses are usually valued by capitalised earnings: what counts is the profit the business can generate over time. The starting point is the adjusted profit of recent years. An owner's salary is deducted, meaning what a hired managing director would cost. The rest is converted into a value with a rate that reflects the risk.
In manufacturing, asset value also plays a role, meaning machinery and buildings. If much revenue depends on a few customers or a large investment is due, the value falls. A broad customer base, modern equipment and a strong team raise it.
According to KfW's 2025 succession monitor, expected sale prices in the Mittelstand have risen by around 34 per cent since 2019. According to the DIHK's 2025 report, 36 per cent of retiring owners expect too high a price. An independent valuation early on protects both sides.
- 06
What to check in due diligence
In manufacturing, the technical review matters as much as the financial one. These questions belong in it:
- What share of revenue comes from the three largest customers?
- Age and condition of the machinery, and which investments are due
- Which certifications the business holds and whether they survive the change
- Who in the team carries the technical know-how, and whether they will stay
- 07
Separating technology and leadership
You don't have to be an engineer to run a manufacturing business. Many successors bring experience in sales, finance or operations and work closely with a strong technical lead.
What matters is that this role is clearly filled before the purchase. For suppliers, it also pays to talk to the main customers early. They want to know that deliveries and quality stay secure.
- 08
Financing
KfW's ERP loan for start-ups and succession (077) finances up to 500,000 euros and at most 35 per cent of eligible costs. You apply through your own bank. If collateral is missing, the guarantee banks of the German states can back loans.
Machinery and buildings can serve as collateral, but they also drive the price. Sometimes it helps to separate out the property and rent it, so the purchase stays affordable.
A vendor loan often completes the financing: the previous owner defers part of the price. According to KfW's 2025 succession monitor, expected sale prices in the Mittelstand have risen by around 34 per cent since 2019. A realistic valuation at the start saves both sides a lot of time.
KfW 077 (in German) · KfW succession monitor 2025, PDF (in German)
Further reading
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Frequently asked questions
Are manufacturing businesses in demand among successors?
Yes. According to the DIHK's 2025 report, 32 per cent of people interested in a takeover are looking for a manufacturing business, more than in any other sector.
Do I need a technical background to take over a supplier?
Not necessarily. What matters is that a strong technical lead is in the team and stays. You can bring sales, finance and leadership.
What is the biggest risk with supplier businesses?
Often the dependence on a few large customers. Check terms, notice periods and change-of-control clauses in the contracts.
Do certifications remain valid after a takeover?
It depends on the type of deal and the certification. Clarify early with the certification body whether a new audit is needed.
Where can I find manufacturers and suppliers to buy?
On the nexxt-change platform, through chamber of commerce succession advice, tax advisers, banks and personal contacts. Many businesses are never advertised publicly.
How do I sell my manufacturing business?
Start early: put the figures in order, make the business less dependent on you, have it valued and then look for successors discreetly. Your tax adviser belongs in it from the start.
How is the price determined?
Usually by capitalised earnings: starting from the adjusted profit of recent years, minus an owner's salary, converted with a rate that reflects the risk. The price finally paid is a matter of negotiation.