Discover emerging trends and key considerations for successful a M&A in the industrial manufacturing industry.
The Industrial Manufacturing (IM) sector continued to experience less than robust merger and acquisition (M&A) activity in Q3’23 thanks largely to recession fears, cost of capital, geopolitical instability, and supply chain fragility. However, there are several reasons for cautious optimism. Advanced technology is propelling transformation in the key IM subsectors – aerospace and defense (A&D); automotive; engineering, infrastructure and construction; and transportation, logistics and distribution – as companies redefine themselves as “smart” industrial manufacturers. And if inflation keeps declining, interest rates flatten, and access to credit eases up, the hope is that the economy will begin to run on all cylinders, setting the stage for a surge in IM M&A activity in 2024.
Our recommendations remain consistent with the emphasis on three current themes:
Although M&A activity in the IM sector may require a few more quarters to gather momentum, the combination of pent-up demand for deals, significant “dry powder” held by potential acquirers, the adoption of innovative technologies, and strategic repositioning are poised to drive increased M&A activity in 2024. But for now, both corporate and PE buyers are emphasizing rigor and discipline in the diligence process, testing of a wide range of scenarios, and looking to avoid both missed opportunities and overzealous pursuits.
For a comprehensive analysis of the M&A landscape in IM and how to take advantage of investment opportunities, download our paper.
The beat goes on: M&A trends in manufacturing
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