Capstone Partners’ Industrial Technology Group (ITG) has published its periodic sector update. In this report, ITG shares observations from its advisory experience with highly specialized smart water companies such as RedZone and also discusses how smart water technologies and digital solutions are proliferating across various applications.
Key highlights from the report include:
- On a macro level, key industrial benchmarks such as the U.S. Purchasing Managers’ Index, durable goods orders, and capacity utilization are recovering after the dramatic impact of COVID-19 and the resulting severe economic contraction.
- Macro weakness is beginning to impact industrial technology companies with slower forward revenue growth rates.
- Common themes among emerging companies include logistical challenges imposed by COVID-19, and hurdles in overcoming procurement processes/establishing channels to market against legacy solutions.
- Merger and acquisition (M&A) activity in the Digital Water sector has been quite compelling as strategics look to quickly expand their technology portfolios and investors look to capitalize on the long-term sectoral trends.
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