Industry Reports

Q1 2019
From both an industry growth and merger and acquisition (M&A) standpoint, 2018 was a monumental year for the Packaging industry. Rising levels of consumer spending and e-commerce sales have generated significant demand for sophisticated packaging services and innovative branded packaging solutions. Strong demand for packaging products and solutions has resulted in a corresponding increase in M&A activity resulting in a banner year. Capstone Headwaters identified 135 announced or closed transactions, a notable uptick relative to the 112 identified during 2017.
Q1 2019
Though tempered relative to that of the previous two years, merger and acquisition (M&A) activity in the Chemicals industry remained healthy during 2018. With 182 transactions announced or closed in the US, there was sustained interest from strategic buyers to pursue M&A as a means to expand geographically, diversify offerings, and improve economies of scale. Strategic buyers looking to add synergistic businesses accounted for 66.1% of deal activity.
Q4 2018
Merger and acquisition activity in the Environmental, Health & Safety industry remains robust as buyers continue to capitalize on market opportunities created by increasing government regulations, mounting corporate concerns regarding risk and potential liability, and favorable end-market dynamics. With a significant degree of industry fragmentation, firms are looking to the M&A market as a means to build scale and to offer clients expanded capabilities and geographically far-reaching services.
Q1 2019
The global Heating, Ventilation, Air Conditioning, and Refrigeration market value is expected to reach $251.6 billion by 2023, growing at an annualized rate of 6.8% during the forecast period, according to Research and Markets. Heightened emphasis on energy conservation as a result of increased environmental concerns and government regulations has promoted energy-efficient designs in new building and retrofit construction.
Q4 2018
Due to the continued deterioration of the nation’s infrastructure, there remains tremendous opportunity for operators in the Water Infrastructure industry to capitalize on the need for cost and time efficient solutions, particularly within the aftermarket and municipal retrofit markets. Large public companies in the space are deploying merger and acquisition (M&A) strategies to fill operational gaps related to products, technology, and geographic exposure. For example, Xylem (NYSE:XYL) has completed six acquisitions since 2016, including two during 2018.
Q4 2018
Despite sensitive economic factors, such as rising tariffs and NAFTA related hurdles, merger and acquisition activity in the Chemicals industry remains unabated. Unstable trade policies and countermeasures between the US and China have generated some uncertainty, however, it has also served as a catalyst for consolidation as operators aim to avoid supply chain disruptions.
Q4 2018
Favorable end-market dynamics continue to serve as a catalyst for the Maintenance, Repair & Operations industry (MRO), as the demand for MRO products and services tends to move in unison with the health of Industrial and Manufacturing industries. The Institute of Supply Management reported a Purchasing Managers’ Index of 59.3% for November, indicating the 27th consecutive month of manufacturing growth.1 Meanwhile, the Industrial Production Index edged to 109.1, advancing 4.7% at an annual rate during the third quarter.
Q4 2018
Expanding US e-commerce sales, growing 15.4% year-over-year in Q2 2018 according to the most recent US Census Bureau report, have increased demand for packaging products and services.
Q4 2018
On the heels of growth in downstream manufacturing markets, demand in the Industrial Equipment industry has been significant. The Industrial Production Index, a measure of manufacturing, mining, and utility output, indicates robust manufacturing activity and has risen 5.1% year-over-year. Rising industrial output has subsequently lead to a 7.1% YOY increase in demand for new industrial equipment and machinery and is expected to reach $925.4 billion by 2023, according to IBISWorld.
Q4 2018
Following multiple years of decreasing merger and acquisition (M&A) activity in the Environmental, Health & Safety (EH&S) industry, Capstone Headwaters has identified a reverse in the trend through year-to-date (YTD) 2018. With 70 transactions announced or closed YTD, activity has increased by 18.8% yearover-year and is on pace to exceed that of each of the previous two years. Strategic buyers maintain a stronghold on M&A activity and have captured 60.0% of deals in the space.

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