Dec 10, 2021

Annual Industrials Industry Report – 2021 Middle Market M&A Activity & Outlook

Pandemic Tailwinds and End Market Growth Fuel Elevated Industrials Deal Activity

Capstone Partners released its 2021 Industrials Industry Middle Market Deal Activity & Outlook Report, discussing merger and acquisition (M&A) volume, macroeconomic impacts, and factors driving premium valuations for industrials companies. The report includes eight sector spotlights featuring insights from Capstone’s Industrials Investment Banking Group, the leading advisor to privately-owned industrials businesses aiming to maximize financial outcomes at every stage of the business lifecycle.

Industrials M&A activity proliferated in 2021 year-to-date (YTD), rising 43% year-over-year (YOY), driven by the reopening of the economy, pent-up acquirer demand, record levels of capital overhang, potential implications of a capital gains tax increase, and a frothy valuation environment. To-date, average EBITDA multiples for industrials transactions have outperformed historic levels as strategics have paid premiums for business that diversify offerings, enhance end market exposure, establish economies of scale, create synergies, and strengthen supply chains. Private equity buyers have demonstrated a willingness to pay more for businesses that align with their investment theses, penetrate growing segments, or enhance the market share of portfolio companies.

Also included in this report:

  • An examination of macroeconomic themes that are expected to impact the Industrials industry in 2022.
  • Six key trends and drivers influencing industrials companies.
  • Sector overview pages highlighting M&A trends, growth dynamics and limitations, and recent notable transactions.

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