Manufacturing

The global outlook for the Manufacturing sector is positive and rebounding. The Manufacturing industry has experienced a recent shift as companies look to develop innovative business models to transition along with the changing demands and ongoing disruption from COVID-19. The emergence of multiple vaccination approvals has led to manufacturers focusing more on demand planning, forecasting, and supplier durability. Companies within the Manufacturing industry are anticipated to be able to better leverage existing assets and investments to accelerate this transformation and procure short-term revenue.

The Manufacturing industry is projected to look to execute a plan for significant shifts in strategy by focusing on capabilities that acknowledge customer preference, as well as improve segments and personas to achieve sustained organic sales growth. Prior to the pandemic, companies within the Manufacturing industry searched for a path to diversify and reduce supply chain costs to open the door for additional Mergers and Acquisitions (M&A) opportunities. As companies emerge from the pandemic, an elevated amount of M&A activity in the industry is expected throughout the projection period to 2025. Exhibit 1 shows the performance of the Manufacturing sector since 2016 relative to the overall economy, comparing sector revenue change to GDP growth from 2016-4Q2020.

Manufacturing revenue totaled $5.6 trillion in 2020. While the average annual contraction within the industry totaled -1.1%from 2015-2020, the industry is expected to grow at an annualized rate of 2.2% to $6.2 trillion from 2021-2026. While effects from the COVID-19 pandemic devastated this industry in 2020, manufacturing is forecast to exhibit a period of resurgence during the outlook period. The US economy is projected to rebound and is expected to generate a robust baseline for Manufacturing industry demand. M&A activity within this industry witnessed many challenges and uncertainty in 2020 due to COVID-19. As businesses emerge from the pandemic, M&A activity is projected to be fueled by access to emerging sources of capital, investment in innovation, and the rightsizing of operations to meet new market demands of a post-pandemic world. Exhibit 2 shows the trends in investing activity from 2015-2020.

The Manufacturing industry represents 54% of the world’s energy consumption and 20% of global emissions so it is critical for this industry to recover and repurpose materials and resources as well as switch to renewable energy to power the industries’ facilities. Manufacturers are likely to navigate through complex and rapidly growing displays of technologies, which include machine learning, artificial intelligence, visualization, and many more to increase revenue, reduce costs, enhance operational efficiency, and answer to customer needs. Businesses within this industry must concentrate on where to invest funds to achieve the ultimate balance of benefits across operations and consumers.

As of the end of FY2020, manufacturing M&A deals worth $845 billion had been announced globally, which include Bulten and PSM International, V99 and Telenav, Catalent and MaSTherCell, TT Electronics and Torotel, and Huntington Ingalls Industries (HII) and Hydroid. Bulten acquired PSM International for $24.5 million as part of their strategic plan to strengthen production capacity and product offering. V99 acquired Telenav for $241 million to accelerate growth and create greater flexibility to execute a connected-car strategy. Catalent’s acquisition of MaSTherCell for $315 million was part of their strategic plan to create an industry-leading cell and gene therapy platform. TT Electronics acquisition of Torotel for $43 million was to broaden their electronic capabilities by expanding its US footprint. HII purchased Hydroid for $350 million to expand their capabilities within a rapidly growing autonomous and unmanned maritime systems market. In sum, the overall outlook for M&A activity in the Manufacturing industry appears to be positive due to the desire to make supply chains more robust in the future.

How Can Madison Street Capital's Experienced Team Help You

Accomplish Your Goals?

Fill out my online form.

How Can Madison Street Capital's Experienced Team Help You

Accomplish Your Goals?

Awards & Recognition

Phone

Chicago

+1 312-529-7000

Accra

+233 277803400

Atlanta

+1 239-287-3789

Austin

+1 512-329-1920

Addresses

Corporate Headquarters
901 Mopac Expressway.
Building 1 Suite 300
Austin, TX 78746

105 W. Madison Street Suite 1200
Chicago, Illinois 60602

MSC-BD, LLC
410 Peachtree Pkwy
Suite 4245
Cumming, GA 30041

Ghana
F168/6 Labone Link
North Labone
Accra, Ghana

Get Connected With Us: