Industry Reports

Published on: 07/15/2012
The investment thesis for the water industry remains firmly intact. That is, there is a growing need for large expenditures in support of the nation’s water infrastructure which will in‐turn benefit many companies in the industry. Specifically, much of our drinking and wastewater infrastructure is nearing the end of its useful life and needs to be upgraded and/or replaced.
Published on: 07/02/2012
The Early Childhood Education industry is highly fragmented with the three largest and top 50 operators estimated to hold only 3% and 20%, respectively, of the market combined. As a result, it is no surprise that ‒ now that M&A and economic conditions are improving ‒ we are seeing heightened consolidation activity in the space with strong interest from both corporate and private equity buyers.
Published on: 06/01/2012
M&A activity in the education technology sector followed the general moderation of transaction volume in the recessionary environment. Finally rebounding in 2011, deal activity thus far in 2012 has eased slightly. However, based on recent activity and heightened interest levels among strategic acquirers, Capstone believes the industry is building a healthy deal backlog and is well poised for renewed M&A volume.
Published on: 05/30/2012
The post-secondary education industry has been on a bit of a roller coaster ride for the last three years. Due to an increasing demand for career-focused education during the economic downturn, most schools were performing very well in 2008 and 2009. As a result, transaction and market multiples were extremely high. In July 2010, with the announcement of pending gainful employment legislation, transaction activity came to a screeching halt and market multiples began their inevitable decline.
Published on: 05/15/2012
The environmental, health & safety sector continues to attract the attention of buyers and investors who view the space as a good opportunity with strong fundamentals that should continue to support long‐term growth of the industry. The sector performed relatively well through the recession, thanks to increasing government regulations and mounting corporate concerns regarding risk and the high costs of protecting against potential liability.
Published on: 05/10/2012
The packaging industry continued to see an uptick in merger and acquisition activity in 2011, with the number of transactions exceeding 85, a figure that represents a 30% increase over the number of deals recorded by the industry in 2010.
Published on: 05/01/2012
Some of the reasons behind the variation in valuation are specific to the buyer, meaning your business may have characteristics that are a “Must Have” to one buyer, but only a “Nice to Have” to another. As a result, valuation is in large part influenced by the needs of and fit with a specific bidder. That said, there are certain attributes of medical device outsourcing companies that buyers will generally pay a premium for, or apply a discount against, relative to the pricing norms for the industry.
Published on: 05/01/2012
An attractive category within the consumer staples industry, the natural & organic products sector is experiencing strong M&A activity, as is the industry as a whole. An estimated 366 consumer staples transactions were reported closed in 2011. This number is about equal to the deal count of 2010. The following chart shows that the consumer staples industry’s M&A activity has largely recovered from the recessionary decline of 2009 and is again experiencing a healthy climate.
Published on: 04/15/2012
The Infrastructure space continues to record subtle wins that incrementally add to the attractiveness of the sector from a mergers & acquisitions standpoint. Whether it be new funding, additional government regulations, or continuing press coverage about the aging infrastructure (as one industry veteran put it “It isn’t getting any younger”), the chips keep stacking on the side of this industry performing well into the future.
Published on: 04/01/2012
M&A activity in the electronic components industry has been recovering for the past two years after experiencing a steep decline in 2009 that reflected both the state of the industry and the capital markets in general. Today, the M&A market is much improved, supported by strong fundamentals including an abundance of cash in the hands of corporate buyers, a large overhang of capital that needs to be deployed by the private equity community, commercial lenders who are once again willing to lend, continued low interest rates, and an improving economy that is likely to boost electr