Suppliers & Distributors Report – February 2021

Value-Added Services Drive Outperformance

Capstone’s February 2021 Suppliers & Distributors Industry Update reports that despite the sharp slowdown in 2020 deal volume, 2021 presents favorable tailwinds as the economic recovery continues. Strategic buyers, accounting for 58% of total deal activity, have displayed an increasing appetite to resume M&A initiatives to bolster geographic reach and value-added distribution capabilities. Private equity firms accounted for 42% of deal activity in 2020, largely consisting of add-on transactions to stimulate inorganic growth in existing portfolio companies.

Included in this report:

• How U.S. economic indicators for the Manufacturing and Services industries have displayed a recovery and are poised for further growth in 2021
• Why distribution companies that offer valued added services such as supply management, product assembly, product bundling, among others, are viewed favorably relative to their peers
• Which types of distributors are expected to receive strong interest among strategic and private equity buyers
• Capstone’s prediction of M&A activity in 2021