Exit and Growth Strategies for Middle Market Businesses

Archive for the ‘Industrials’ Category

M&A News From the Industrials Industry

By John Hammett | Jul 23, 2015

Car MfgAccording to a report from international consulting firm PWC, the industrials sector is expected to continue to prosper for the remainder of 2015 as larger corporate buyers seek to acquire improved technology, facilities and people. The US Federal Reserve’s decision to keep interest rates low has substantially lowered the cost of M&A funded by debt. For companies with limited growth opportunities, acquisitions are a natural path to bolstering market share. 

Manufacturers may be more cautious with inventory, production, staffing and capital expenditure strategies if US industrial production growth remains flat in the coming months.US industrial production of manufactured goods unexpectedly fell 0.2% in May 2015 compared to the month before. The recent stagnating US industrial output has sparked concern among some economists that US manufacturing may be in a technical recession. Economists polled by MarketWatch had expected to see May industrial production growth of 0.2%. Manufacturing activity has slowed as the strong dollar has made US exports less competitive in overseas markets. In addition, the decline in oil prices since mid-2014 has reduced investment in new equipment by energy producers. Overall global economic weakness also has contributed to reduced demand for US manufactured goods.

According to data from the Institute for Supply Management (ISM) industries in the industrials sector reporting growth in manufacturing include paper products; printing and related support activities; furniture; primary metals; nonmetallic mineral products; and food, beverage, and tobacco products. Three industries reporting a decline include textile mills; apparel, leather, and allied products; and computer and electronic products.

Posted by John Hammett.

Read the Entire Industrials M&A 3rd Quarter Newsletter Here

Industrials M&A News

By John Hammett | Jun 19, 2015

industrials-1Industrials M&A: US industrial production in  of several types of industrial chemicals increased in December 2014 compared to same period a year earlier. Production of basic chemicals rose nearly 4 percent. Industrial gases saw production grow more than 9 percent, while basic inorganic chemicals saw an increase of more than 8 percent. Organic chemical production increased just over 2 percent. Overall, US industrial production, a general indicator of demand for industrial chemicals, grew more than 4 percent in 2014 compared to the prior year.

Slowing growth in the oil production sector could reduce demand for some industrial equipment wholesalers. Oil production and prices have boomed in recent years, particularly in the US, but Brent crude spot prices recently hit a six-year low. Falling oil prices are expected to slow production growth over the next two years among non-OPEC suppliers, a key customer segment for industrial equipment dealers. US crude oil production, which rose 16 percent in 2014, is projected to grow 8 percent in 2015 and 2 percent in 2016, according to the US Energy Information Administration’s Short-Term Energy Outlook for February 2015.

The best post-recession year for machine tool consumption could be ahead in the remainder of 2015, according to the Gardner Research Capital Spending Survey and Forecast. Metal cutting machine tool consumption is expected to grow by close to 40 percent and reach $8.8 billion by the end of the year. Gardner predicts that the US could become the top consumer of CNC machine tools in 2015, for the first time since 2000. Top industries for machine tools in 2015 include job shops, machinery and equipment manufacturers, and automotive in Industrials M&A.

Posted by John Hammett.

Read the Entire Industrials M&A 2nd Quarter Newsletter Here

Q4 Industrials M&A Update

By Kim Levin | Dec 01, 2014

737632-industry-on-a-misty-night for blogM&A activity for North American based industrial target companies in Q3 2014 included 563 closed deals and total deal value of $20.3 billion, according to data provided by S&P Capital IQ. This is a slight increase from the previous quarter where 541 deals were closed. Total transaction value increased from $11.4 billion to $20.2 billion from Q2 2014 to Q3 2014 largely due to the AECOM acquisition of URS Corporation.

Oil, gas, and petrochemical related companies dominated industrial manufacturing activity. Almost 40 percent of US related transactions were energy related deals. In addition, there were several mega-deals announced, indicating the market has grown and is actively looking to consolidate. According to the report, industrial manufacturers will continue searching for growth in non-core businesses with good leadership and an existing competitive edge.

Read the Entire Industrials M&A 4th Quarter Newsletter Here

Q3 Industrials Industry Update

By Kim Levin | Sep 19, 2014

latheM&A activity for North American based industrial target companies in Q2 2014 included 517 closed deals and total deal value of $10.3 billion, according to data provided by S&P Capital IQ. According to a report from, President & CEO Magazine, a business trade magazine, M&A activity surged in the second quarter with the industrial sector on track to post the strongest year of M&A since before the 2008 financial crisis.  

According to a report from PricewaterhouseCoopers, an international consulting firm, the industrial sector saw a 72% increase in transaction announcements over Q1. Several mega-deals were announced, and although some were withdrawn, it indicates that the market has grown and is actively looking to consolidate. According to the report industrial manufacturers will continue to search for growth in non-core businesses with strong leadership and an existing competitive advantage.

Read the Entire Industrials M&A 3rd Quarter Newsletter Here

Q2 Industrials Mergers & Acquisitions Update

By Kim Levin | May 23, 2014

Ind. FactoryM&A activity in the Industrials sector for North American based target companies in Q1 2014 included 549 closed deals according to data provided by S&P Capital IQ. Activity was largely driven by the successful completion of several mega deals, or transactions worth more than $1 billion, according to published by consulting firm PwC US. According to PwC, strategic buyers continued to be the most active buyers, accounting for more than 80 percent of total deal activity. However, financial buyers remain active in the space as their limited partners put pressure on them to put capital to work.

Read the Entire Industrials M&A 2nd Quarter Newsletter Here

Industrials Q1 M&A Update

By Kim Levin | Mar 28, 2014

Car ManufacturingM&A activity in the North American Industrials sector for Q4 2013 through February 10, 2014 included 946 deals announced or closed according to data provided by S&P Capital IQ. Strong momentum in the period is projected to continue into 2014 according to data published by international consulting firm PriceWaterHouseCoopers. In a sector as broad and imperative to the economy as industrials, improving macroeconomic trends and fundamentals are an indicator of the level of M&A activity. Average debt to EBITDA multiples continue to steadily increase, reaching 4.5x as of November 2013, according to S&P Capital IQ. This, in addition to the availability of cash with attractive terms, provides strategic and private equity buyers with numerous opportunities to recapitalize balance sheets and pursue liquidity events, which drives M&A activity and increases valuations.

Read the Entire Industrials 1st Quarter Newsletter Here

Industrials M&A Activity Update

By Kim Levin | Jan 17, 2014

hand-holding-industry-cubes-10079762M&A activity in the Industrials sector for Q3 2013 was active with 499 deals under $1 billion announced or closed. This sector includes manufacturers, refiners and energy producers. Overall financial stability across all industries coupled with increasing access to capital for middle market industrials companies has spurned significant growth in the sector, which has led to the uptick in M&A activity. Without a significant change in the fundamentals of the economy there is no reason for this trend not to continue.




Read the Entire Industrials 4th Quarter Newsletter Here

Industrials M&A Activity Update

By Kim Levin | Oct 22, 2013

Industry on misty nightAccording to data published by PwC US, financial investors in the industrial manufacturing space renewed their M&A appetites in 2013, increasing deal activity by approximately 40 percent year over year. Strategic investors continued to close the most transactions, but the rise in activity by financial investors is a signal that dry powder sitting on the sidelines for so long is finally getting to work. The majority of deals in 2013 have fallen into the middle market category (transactions worth $50 million to $250 million) with North American companies being the most active.

Read the Entire Industrials 3rd Quarter Newsletter Here

Selling a Middle-Market Manufacturing Business?

By Kim Levin | Jul 27, 2011

What You Need to Know Now

The hour that I spent listening to an overview of the Manufacturing Industry M&A Market Monday morning was time well spent.  More than anything it confirms what I already knew to be true…even looking at a very narrow sector of the market…times, they are improving…albeit slowly.  Morgan Burns of Faegre & Benson, Michael Dillahunt of Piper Jaffrey, Mike Israel, Mill City Capital and Bob McGrath of H.B. Fuller & Company joined forces to discuss the current state of M&A in the manufacturing sector, each bringing a different expertise to the panel.  If you didn’t have time to listen, but still want to know what was said, read on. Read more »