2020: MORE SMALL MANUFACTURING ACQUISITIONS PREDICTED
2020: MORE SMALL
MANUFACTURING ACQUISITIONS PREDICTED BY FRANCES BRUNELLE
The uncertainty on the political front, trade wars, and a pandemic prognosis for recession globally, simply does not translate to the U.S. market. Easy financing conditions along with earlier tax cuts and shifting small manufacturing demographics are driving deal activity for the next decade through 2030. Mergers and acquisitions (M&A) multi-year run of unprecedented activity shows no signs of slowing. The drivers include the continued strength of the equity markets and the private equity class. Private equity (PE) has been a meaningful participant in recent acquisition activity,
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Manufacturing Outlook / November 2019
benefiting from a continued low interest rate environment. Since the 2008 financial crisis, the volume and number of PE transactions have grown at a compound annual growth rate (CAGR) of 20%, reaching $741 billion in total deal value, according to financial data provider PitchBook. The popularity of PE as an asset class has also continued to grow among investors. The 2020 Story: Small manufacturing <$20M The 2020 acquisitions are probably not the big IPOs. These are the $2M - $20M manufacturers, who after decades of building a worthwhile operation, are ready to sell. The buyers often