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Exit and Growth Strategies for Middle Market Businesses

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M&A Quarterly News In The Industrials Sector

By Steve Hauser | Feb 26, 2019

The report below gives a good overview of the first quarter M&A activity in the Industrials Sector. M&A activity for North American based target companies in the Industrials sector for Q4 2018 included 117 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions closed in October when Nine Energy Service, Inc. acquired Magnum Oil Tools International Ltd for US$507.1 million in cash, stock and contingent payout. The transaction enhances Nine Energy Service’s portfolio of pipe business. It offers flag plugs, magnum disks, setting tools, composite cement retainers, floatation devices and more. Magnum Oil Tools International is located in Corpus Christi, Texas and manufactures downhole products.

Industry Indicators

  • Total US manufacturers’ shipments, which indicate manufacturing sector activity, rose 7.6% year-to-date in October 2018 compared to the same period in 2017.
  • The spot price of crude oil, which indicates energy prices paid by manufacturers, fell 19.7% in the week ending January 11, 2019, compared to the same week in 2018.
  • US steel mill product prices, an indicator of commodity steel costs for manufacturers, rose 18.5% in December 2018 compared to the same month in 2017.

Posted by Stephen Hauser.

Read the Entire Industrials 1st Quarter Newsletter Here


M&A Quarterly News In The Industrials Sector

By Steve Hauser | Nov 09, 2018

The report below gives a good overview of the fourth quarter M&A activity in the Industrials  sector. M&A activity for North American based target companies in the Industrials sector for Q3 2018 included 95 closed deals, according to data published by industry data tracker FactSet.

Fully one-third of the transactions had a Non-U.S. company as either the direct acquiror or the acquiror’s ultimate parent. Canadian and German firms were the most active buyers, and Sandvik AB from Sweden was involved in two transactions. Several of these are in the highlighted transactions table below. We believe the robust U.S. economy and more now-attractive corporate tax rates will auger well for strong additional in-bound investment.

Another six of the transactions were in the Oil & Gas industry, specifically drilling and development goods and equipment.

Read more »


M&A Quarterly News In The Industrials Sector

By Steve Hauser | Aug 14, 2018

The report below presents you with a good overview on the third quarter M&A activity in the Industrials  sector. M&A activity for North American based target companies in the Industrials sector for Q2 2018 included 96 closed deals, according to data published by industry data tracker FactSet.

One of the notable middle market transactions was announced in June when Entegris, Inc. acquired SAES Pure Gas, Inc. from SAES Getters SpA for US$355 million in cash, funded from its available cash. The transaction expands Entegris’ semiconductor business. SAES Pure Gas is located in San Luis Obispo, California and manufactures and supplies gas purifiers. SAES Pure Gas reported a revenue and an adjusted EBITDA of US$91.5 million and US$33.1 million, respectively, for the fiscal year ended December 31, 2017.

Buoyed by a strong economy industrial production was strong during Q2 and is expected to remain that way into Q3.
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M&A Quarterly News In The Industrials Sector

By Steve Hauser | May 10, 2018

The report below presents you with a good overview on the second Quarter M&A activity in the Industrials  sector. M&A activity for North American based target companies in the Industrials sector for Q1 2018 included 60 closed deals, according to data published by industry data tracker FactSet.

One of the notable transactions of the quarter was announced in March when Tooling Technology LLC, a portfolio company of GenNx360 Capital Partners, acquired Century Tool & Gage Co, a portfolio company of First Capital Partners LLC, Broadgate Capital LLC (Texas) and Highline Equity Partners LLC, for an undisclosed amount. The transaction also includes Century Tool & Die and CTG Bel-Kur. The acquisition complements Tooling Technology LLC’s existing operations.

Manufacturing continues to adopt automation technologies to enhance quality, labor productivity and safety. While the population of robots in U.S. factories has increased dramatically the potential for further growth is enormous considering the size of the U.S. and our machine/worker ratio vs. traditional global peers Japan and Germany.

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Buyers & the Sell-Side Process

By Steve Hauser | Jun 27, 2016

sell-side processThe M&A environment in the U.S. is as heated as ever; and, while those of us in Middle Market Investment Banking more often than not represent sellers, we relish working with buy-side clients with well-defined missions and criteria.

We understand that the Holy Grail for any buyer is the one-on-one “negotiated” deal with a seller, where there is no sell-side advisor, no competition from other buyers, no hard-and-fast timetables, and the due diligence routine is very accommodating to the buyer.  However, though these “proprietary” deals do exist, they are uncommon, especially for those sellers at or exceeding $5 million in EBITDA. Instead, the buyer should expect that any well-run, solidly profitable Middle Market company will be represented by an Investment Banker and sold through what we call in the industry, “the Process”.

The M&A market in the U.S. has been and continues to be fueled by very low “real” interest rates, exceptional amounts of cash in PE firms, hedge funds, and large corporations, and moderate-at-best macroeconomic (i.e. organic) growth prospects.  Demand for good deals exceeds the available supply of good targets, and the sell-side auction-like process is an entrenched feature of our M&A market.  Prospective buyers, particularly bargain hunters from offshore, can find the experience to be a challenge, wishing they had more control, less pressure to modify their offers, and general freedom from the constraints of “the Process”. Read more »


Private Equity Cashes In

By Steve Hauser | Jul 27, 2015

MoneyThe fine folks at Pitchbook recently published their Q3 2015 Private Equity Breakdown and there are 3 key story lines to note:

•  U.S. – based PE exits in throughout 2014 and H1 2015 were and remain at extraordinary levels in $. In 2014 PE exits totaled $167 Billion, a record, but with the rate of exits in 2015 that value will be exceeded by the time you read this. And we’ll have 5 months left in the year!

•  The Investments-to-Exits ratio (based on # transactions) was only 1.7X for H1 2015, the lowest ratio in 10 years.   To some degree, the PE industry is “emptying the closet”.

•  Corporations are the big customers for such exits, outspending larger PEs 8:1 in H1 2015, and they likely will double their spending over 2014 by year-end….exceeding $300 Billion. Read more »