Industrials
Industrial Insights
The Trend
INDUSTRIAL TECHNOLOGY
Industrial Technology faced significant challenges over the year and displayed the weakest performance among the three categories. The sector's one-year index performance showed steady growth through the first half of the year but gradually lost momentum, trailing behind both Industrial Services and Traditional Industrials by year-end. This underperformance is reflected in the declining median EBITDA multiple, which dropped from 10.5x in 2023 to 9.6x in 2024. Financing and transaction activity in the sector remained moderate, suggesting a cautious investment environment as the market prioritized scaling existing technologies rather than pursuing disruptive innovation.
INDUSTRIAL SERVICES
Industrial Services emerged as the top-performing sub-sector, closely tracking the S&P 500 by the end of 2024. The sector benefited from strong demand for outsourced services in high-growth areas like environmental services, TICC, and plumbing. This is reflected in the significant rise in median EBITDA multiples from 12.1x in 2023 to 14.4x in 2024, showcasing the sector's resilience and attractiveness to investors. Financing activity and transaction counts were robust, with private equity driving consolidation to capitalize the ongoing demand for efficient service providers. The strong year-end performance signals sustained confidence in the Industrial Services arena.
TRADITIONAL INDUSTRIALS
Traditional Industrials demonstrated resilience in M&A activity, with consistent deal flow throughout the year. The transaction count in this category remained the highest among the three sub-sectors, reflecting its foundational role in industries such as manufacturing, utilities, and infrastructure. This sustained activity was supported by strategic and private equity buyers seeking to capitalize on the steady performance and essential nature of these businesses. While the sector's median EBITDA multiples remained stable at 11.6x, the consistent transaction volume highlights its ongoing attractiveness for investors aiming for stability and incremental growth opportunities. Traditional Industrials continue to serve as a reliable area for deal-making in a dynamic market environment.
Industrials Industry Commentary
“This was led by a very strong growth in the Electrification business area, with particularly high demand in the data centers and utilities segments as well as an overall positive development in the buildings segment.”
–
Morten Wierod, CEO; ABB Ltd.
“Demand in our end markets is strong, and we are seeing continued momentum on driving higher gross profit across the business. Heading into FY25, we expect positive trends across Water and Environmental, Critical Infrastructure and Life Sciences and Advanced Manufacturing.”
– Bob Pragada, CEO; Jacobs Engineering Group
“[Exxon] is well positioned to meet surging demand from data centers for low-carbon power and on a timetable that alternatives such as nuclear simply can't match.”
– Darren Woods, CEO; Exxon Mobil
Industrial Summary & Outlook
UTILITIES & TELECOM SPOTLIGHT
Over the past 12-months, our team has engaged with more than 400 buyers to assess the evolving M&A landscape. As we look ahead to 2025, dynamics of the Utilities & Telecom sector remain compelling yet distinct; while both sub-sectors face unique challenges, the overarching sentiment is one of optimism and strategic alignment.
What’s driving the Utilities sector’s momentum? The Utilities sector has stabilized following pandemic-induced fluctuations and is poised for continued momentum into 2025. Buyers recognize the long-term value of infrastructure assets that deliver predictable cash flows and align with sustainability goals all while accommodating increasing demand from data centers and electrification initiatives
What about the Telecom sector? Telecom presents a more nuanced picture. Growth in this space is being led by advancements in 5G, fiber network expansion, and the integration of AI for enhanced operations and customer service. However, the sector’s deceleration, driven by market saturation and changing consumer demand, highlights the need for strategic, smaller-scale acquisitions over transformative deals
What does this mean for sellers? For sellers in the Utilities & Telecom market, the current environment offers opportunities, particularly within the lower middle and middle markets, where buyers remain active in identifying scalable assets With ~400 M&A transactions recorded in 2024 and a median transaction size of ~$46 5M(1), the landscape illustrates targeted opportunities in key segments to align with forward-thinking buyers.
What does this mean for buyers? Buyers in the Utilities & Telecom sector are navigating a landscape rich with potential Large players remain active in pursuing acquisitions that enhance their capabilities and expand their reach. The emphasis on infrastructure as an essential driver of valuation means that buyers are willing to pay premiums for assets that ensure predictable cash flows and operational resilience.
Looking ahead The Utilities & Telecom sector is poised for continued transformation heading into 2025 The resilience of the Utilities market and the Telecom sector’s drive toward digital innovation reflects the underlying strength and adaptability of this industry. We, at Harbor View, are committed to supporting our clients as they navigate this dynamic landscape, leveraging our deep expertise to unlock value and drive growth. Our enthusiasm for the Utilities & Telecom sector remains unwavering, and we look forward to partnering with industry leaders to capitalize on the opportunities that lie ahead.
Key Economic Indicators
Source: Board of Governors of the Federal Reserve System
Source: U.S. Bureau of Labor Statistics
Source: U.S. Bureau of Labor Statistics
Source: Board of Governors of the Federal Reserve System
$700,000 $800,000 $900,000 $1,000,000 $1,100,000 $1,200,000 $1,300,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 $1,000,000 $1,100,000
Source: U.S. Census Bureau
Total Construction Spending (Residential)
Source: U.S. Census Bureau
Industrial Public Trading Statistics
Harbor View’s Industrial Sub-Sectors
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Comparative Median EBITDA Multiples
Source: PitchBook, Data as of 12/31/24
One-Year Historical Index Performance
Select Industrial Public Trading Statistics
INDUSTRIAL TECHNOLOGY
Note: Privately held companies typically trade at a discount to public companies Source: PitchBook, Data as of 1/29/25
Select Industrial Public Trading Statistics
INDUSTRIAL
SERVICES
Note: Privately held companies typically trade at a discount to public companies
Source: PitchBook, Data as of 1/29/25
Select Industrial Public Trading Statistics
TRADITIONAL INDUSTRIALS
Note: Privately held companies typically trade at a discount to public companies
Source: PitchBook, Data as of 1/29/25
Select Industrial Public Trading Statistics
CONGLOMERATES
Note: Privately held companies typically trade at a discount to public companies
Source: PitchBook, Data as of 1/29/25
Select Industrial Venture Capital Activity
EARLY-STAGE VENTURE
LATE-STAGE VENTURE CAPITAL
Industrial M&A Summary
Industrial Expertise
Broad & Deep Industrial Expertise
Industrial Recycling Provider
Acquired by
STRATEGIC BUYER
White Glove
Transportation & Logistics
Acquired by
FINANCIAL BUYER
Metal Processor
Acquired by
FINANCIAL BUYER
Property Management Provider
STRATEGIC ADVISORY
SERVICES
Aerospace Component Testing Provider
Acquired by
STRATEGIC BUYER
Telecommunications Infrastructure Provider
Acquired by
FINANCIAL BUYER
Fluid Dynamics
Designer & Engineer
Acquired by
FINANCIAL BUYER
Light Industrial Staffing Provider
Acquired by
FINANCIAL BUYER
Solar Lighting Designer & Integrator
Acquired by
STRATEGIC BUYER
Note: Unless displayed with the Harbor View logo, the transactions documented were executed in previous roles
Wireless Tower Owner & Operator
Acquired by
STRATEGIC BUYER
Connect with Our Industrials Team
Building on his 27 years of Investment Banking and Private Equity experience, Nate leads Harbor View’s Industrials practice. In its role, the Industrials team advises clients in the Industrial Technology, Industrial Services, and Traditional Industrial sectors helping business owners navigate the company sale, acquisition, and capital raise processes.
Metal Fabricator
Acquired by
FINANCIAL BUYER
Data Capture & Analysis Provider
Acquired by
STRATEGIC BUYER
Suzi Felix Senior Associate
Carson Lubin Analyst
Zuri Goodman Associate
About Harbor View Advisors
Operating at the intersection of investment banking and management consulting, we partner with inspiring companies and private equity firms to help them design and execute their strategies for growth or exit. With decades of successful client outcomes, we help growing teams improve their opportunities for success. We provide Sell-side advisory, Buy-side advisory and Strategic Consulting to innovative companies and financial sponsors.
Call 904 285 4278
Email vision@hvadvisors.com Visit harborviewadvisors.com
Appendix – Industrial M&A Transactions
TRADITIONAL INDUSTRIALS
Appendix – Industrial M&A Transactions
INDUSTRIAL TECHNOLOGY
INDUSTRIAL SERVICES
The material in this report is for information purposes only and is not intended to be relied upon as financial, accounting, tax, legal or other professional advice. This report does not constitute and should not be construed as soliciting or offering any investment or other transaction, identifying securities for you to purchase or offer to purchase, or recommending the acquisition or disposition of any investment Harbor View Advisors does not guarantee the accuracy or reliability of any data provided from third party resources Although we endeavor to provide accurate information from third party sources, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future