InSight

Exit and Growth Strategies for Middle Market Businesses

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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 »