Strategy
We seek out “hidden champions" – well managed, excellently positioned companies with typical SME strengths: in-depth market intelligence, customer-focus, innovation, loyal workforce and swift decisions-making processes.
GESCO AG identifies and acquires these companies and offers them a long-term future in the Group’s portfolio with the objective of advancing and developing their business.
There are a great number of “champions" in the German SME segment and many owners of these companies are facing unresolved succession issues. This prompted a group of private investors to carve out a business model and found a company in 1989 which is today GESCO AG. Their idea was to help SME companies with unresolved succession issues bridge the gap while at the same time tapping into the investment upside of succession planning.
GESCO AG has maintained this philosophy until the present day. We only acquire SME manufacturing companies and focus on tool manufacture/mechanical engineering and plastics technology segments.
In contrast to private equity companies GESCO AG makes a long-term investment, generating its returns from the operating income of its companies and without pursuing an exit strategy by disposing its assets at a later date. The Group generates growth organically by developing its existing investments as well as well as by acquiring additional subsidiaries.
As a rule GESCO AG takes over 100 percent of the shares from the owner and installs a new managing director, who can then buy a 10 to 20 percent stake in the company after a trial period of one to two years. The end of an era for one business owner transitions into a new beginning for someone else.
Granting managing directors a stake in the company attracts entrepreneurially minded managers, adds stability to companies and the Group as a whole and ensures that the interests of all involved parties are balanced. All decisions are driven by sustained positive company development.
GESCO itself is a lean organization with a team of twelve members of staff. Their task is to identify and acquire suitable target companies as well as to select and appoint new managing directors. At the next level the holding is responsible of offer the company continued intensive by providing controlling, coaching and consulting services.
