M&A activity for North American based target companies in the Metal Fabrication sector for Q2 2015 included 36 closed deals, according to data published by industry data tracker FactSet. The average transaction value was $39 million. According a report from the Fabricators & Manufacturers Association, an industry trade group, the industry appears to be ripe for significant consolidation. There is a recent trend among OEMs to limit the amount of shops they work with and instead award contracts to a select group of preferred suppliers. Many mid-size shops are looking to diversify their customer bases and acquire new capabilities to survive in this environment. Those that don’t follow this trend are likely targets for acquisition.
Industry production continues to improve since a low point following the global recession in 2010. Fabricated metal product manufacturing capacity is at its highest point in more than five years. This has partially been driven by an uptick in U.S. based manufacturing as well as continued depression in the prices of raw materials.
Posted by Bob Contaldo.