Lincoln International’s experts share insights into the trends impacting the refrigeration and air conditioning market in Germany and beyond.

Montoya: Lincoln International is a global investment banking advisor specializing in private capital markets. Our goal is to achieve the best possible outcomes for our clients in mergers and acquisitions (M&A) transactions, valuations and financing matters. Lincoln International has maintained a presence in Germany since 1999, with a current team of over 100 employees.

Our core philosophy is to serve as a trusted partner for our clients, providing advice that is both integrity-driven and solution-oriented. We view ourselves as a vital link connecting entrepreneurs, investors and strategic partners worldwide. Particularly in the field of M&A, our clients can rely on our extensive expertise, sector-specific know-how and a robust international network.

Our objective is to create value for our clients and to support them in their strategic development through tailored solutions. We place great emphasis on building lasting relationships and meeting the individual needs of our clients to the fullest extent possible. The refrigeration and air conditioning industry constitutes a key pillar of our market coverage. Over recent years, we have successfully advised on, and facilitated, numerous transactions. To cite just a few examples from 2025: We served as advisors on the sale of KKL to bluu unit, the sale of Mobil in Time to Aggreko, the sale of DDC to Daikin and the sale of Groupe Atlantic to Paloma Rheem.

In recent years, M&A has emerged as a critical strategic factor in the industry’s development, and it will continue to represent a central option for many market participants in the future.

Montoya: We are primarily financial experts, and our experience focuses first and foremost on the evolution of relevant markets and on strategic issues facing market participants, particularly with regard to growth.

However, we have been active in the field of heating, ventilation, air conditioning and refrigeration (HVAC) technology for years now, and through this involvement, we have developed considerable technical competence. Although we are not engineers ourselves, we naturally always keep a close watch on market-relevant technical developments as well as the changing regulatory landscape.

Montoya: On an international level, we observe sustained growth, driven primarily by increased demand for energy-efficient and sustainable solutions. Global climate targets, stricter environmental regulations and a generally growing awareness of climate protection are prompting manufacturers and service providers to increasingly invest in innovative and climate-friendly refrigeration and air conditioning technologies.

We are also sensing this shift quite distinctly within the European and German markets. Regulatory mandates, such as the F-Gas Regulation, are accelerating the transition toward more environmentally friendly systems. This, in turn, encourages investment in alternative refrigerants and state-of-the-art systems.

Furthermore, we view the dynamic expansion of markets such as data centers and quantum technology as an exponential growth driver for the industry in the coming years. This trend will also significantly heighten the technical requirements for all market participants. Added to this are further challenges, such as the recruitment and training of qualified personnel.

Montoya: We identify four megatrends that will shape the refrigeration and air conditioning market in the coming years: energy efficiency, including regulatory requirements; digitalization; urbanization; and global warming. From our perspective, these factors will drive the industry’s long-term development.

At the same time, we anticipate increasing market consolidation. While both strategic and financial investors are showing significant interest in companies within this sector, many business owners are asking themselves whether their companies are well-prepared for market developments and how they can best position them accordingly. A prominent example of this is Viessmann. However, we are observing this trend across many areas and throughout the entire value chain, from component and system manufacturers to installers and service providers, and even into the equipment rental sector.

Montoya: I am referring specifically to the “Viessmann Climate Solutions” division and its integration with Carrier. The family did their homework, accurately identifying future challenges despite the currently booming market. One must always ask oneself: Are our own resources sufficient without a sale or a partnership to ensure long-term success? In this particular case, the family will continue to participate in this thriving market through their retained equity stake in Carrier, while investing the additional capital generated by the sale into various other sectors, representing a significant act of diversification.

Montoya: Many companies today face major challenges: digitalization, the professionalization of processes, international positioning and labor market trends can overwhelm small businesses. With extensive operational experience in these areas, access to expert networks, financial expertise and additional capital, an investor can provide substantial support to a company and drive its further development. Moreover, in many cases, the issue of succession arises; for instance, when the founders’ children show no interest in taking over the business.

A partnership with an investor can secure the succession, provide companies with a significant competitive advantage and substantially accelerate both growth and professionalization. Furthermore, the shareholders, management and other staff members all share in the company’s development and value creation.

Montoya: In this context, being small is not automatically a virtue. Many small companies find it more difficult to shoulder necessary investments than their larger competitors do, and they struggle to develop comprehensive, future-proof solutions and successfully bring them to market. In such cases, consolidation can bolster the competitiveness of both individual companies and entire markets, while simultaneously increasing the benefits for society and consumers.

The risk of market dominance is far more likely to arise from the merger of large corporations, i.e., entities that have each already secured a substantial market share. This is precisely where antitrust authorities keep a very watchful eye.

Montoya: Competition is vital because it fosters innovation, quality and fair pricing. However, it is not only mergers that can harm competition; market displacement can do so as well. Currently, in many markets, we are witnessing how the pressure to undergo transformation can overwhelm companies, particularly small ones. Larger, consolidated companies are often better positioned to invest in digitalization, modern technologies, and professional organizational structures in order to boost efficiency and service quality.

In dynamic and challenging markets, pooling resources and expertise can future-proof companies, bolster the competitiveness of the entire industry and ensure that end consumers benefit from innovative and superior products and services.

Montoya: The majority of private equity investors realize their return objectives by adopting a long-term, sustainable approach to their investments, working in close partnership with both management and the workforce. A successful financial investor pursues a strategic concept aimed at the continuous, long-term appreciation of the company’s value. This concept is typically developed and implemented jointly with the management team.

Investments in digitalization and human capital, organizational professionalization or market entry into new sectors are factors that many companies can no longer manage on their own. Today, investors provide not merely capital, but also expertise and access to an extensive network. They foster innovation and expansion, thereby strengthening the company’s overall competitiveness.

Montoya: A company is only worth what it can achieve in the future. Without a long-term perspective, it does not constitute a sound investment. Of course, there are other factors involved, but a core component—and the very heart of the enterprise—is its employees and their motivation. A financial investor does not run the company personally; they therefore enter into a partnership with the management team and the staff. Admittedly, there are occasional negative examples, but these are the exception, not the rule.

Montoya: First and foremost, we observe that international investors, particularly those active across multiple countries, have for years been engaging deeply with the specific cultural nuances of their potential partner companies. These cultural aspects constitute a vital ingredient for a successful collaboration.

Consequently, the number of international investors active within the European region has steadily increased. Today, many investors both large and small maintain a regional presence or, at the very least, employ team members hailing from the respective local markets to ensure effective cultural exchange and leverage local expertise.

However, it is not only major players like Blackstone—one of the world’s largest private equity firms—but also private equity firms focused on smaller-scale partnerships that are increasingly prioritizing international and cultural diversity. A growing number of financial investors are carving out a niche for themselves across various European countries by focusing on socially and environmentally sustainable investments and have established local teams to support these initiatives.

Montoya: Indeed, Germany is not exactly unknown for its bureaucracy. However, investors familiarize themselves with it and hire people who are well-versed in the market. Lincoln, too, has our own dedicated teams.

Is it an obstacle? In the context of competing with other countries, yes; but nevertheless, as Europe’s largest economy, Germany remains highly attractive to investors.

KKA: Thank you very much for the interview.

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