Industry Reports

Published on: 01/25/2021
COVID-19 has placed heightened focus on labor supply constraints in the Healthcare industry as hospitals struggle to meet the demand for care amid surging case volumes.  Healthcare staffing firms have played a critical role in efficiently scaling healthcare providers’ workforce requirements, while navigating a highly dynamic labor environment. 
Published on: 01/19/2021
Capstone Headwaters has released its most recent Health & Wellness update, available for download below. The Supplements industry has powered through COVID-19 by leveraging e-commerce capabilities, which has been reflected in premium valuations, fueling what could be a positive merger and acquisition trend for business owners.  
Published on: 09/29/2020
Construction activity has demonstrated resilience amid substantial COVID-induced headwinds, providing enhanced visibility for upstream aggregates providers.  Following a 12% increase in construction starts in October led by the Nonbuilding segment, November activity modestly fell 2%, according to Dodge Data & Analytics.  However, industry optimism has been supported by the steady recovery in the Nonresidential sector, which registered a 19% increase in starts, buoyed by a 27% rise in the Commercial sector. 
Published on: 01/04/2021
Companies in the space have been forced to rapidly adapt their business models amid the COVID-19 pandemic, as state-mandated lockdowns restricted in-store sales and consumer spending retracted due to job losses and economic uncertainty.  The technology changes that were accelerated and the possibilities that were illuminated during this era will undoubtedly reshape much of the Retail industry going forward as winners and losers are assessed in the aftermath of the pandemic and their business models replicated. 
Published on: 12/16/2020
Rapid consolidation in the past few years, has resulted in public strategic buyers allocating substantial capital toward acquisitions of regionally-focused operators to increase market share. As competition tightens among these dominant public companies, smaller, regional leaders will be poised to attract M&A interest. Industry participants with diverse revenue streams across a manifold of industries and customer bases are expected to retain defensibility and continue to see steady performance amid virus-induced uncertainty.
Published on: 12/14/2020
Following substantial headwinds during the onset of the pandemic, the Home Goods industry has demonstrated a remarkable recovery driven by consumers’ heightened focus on home furnishings and improvement amid increased time at home.  Quarantine restrictions and work from home trends are fueling home goods spending and investors are showing increased attraction to the sector.  Capstone expects merger and acquisition (M&A) activity to accelerate for quality home goods companies with established online channels, strong brand recognition, and differentiated business models. 
Published on: 12/08/2020
As the pandemic swept across the globe, strategic and private equity buyers focused on internal risk mitigation strategies to assess operational and liquidity concerns.  In addition, sellers have largely delayed exits as owners assess valuation impacts and look for enhanced visibility into capital markets. As vaccine and political uncertainties ease, Capstone believes 2021 will yield a window of opportunity for sellers, as private equity buyers remain flush with capital and strategic buyers become less concerned with their own liquidity.
Published on: 12/07/2020
Increasingly expansive IoT (internet of things) applications and rapid migration to cloud-based platforms has necessitated heightened focus on robust and cost-effective cybersecurity solutions.  Global cybercrime is expected to inflict approximately $6 trillion in damage in 2021, according to Cybersecurity Ventures, placing critical importance on innovative network security capabilities including real-time threat intelligence, advanced endpoint protection, and security automation to safeguard assets and data.
Published on: 12/01/2020
Through Q3, merger and acquisition (M&A) volume reached 60 deals and surpassed the year-to-date volume seen in 2019 (52 deals), 2018 (44), and 2017 (56).  Warehousing, Logistics-Specific Back Office, and E-Commerce Software were three sectors that saw a noticeable increase in deal volume.  Capstone expects M&A and venture capital (VC) activity to increase in 2021 as executives place a greater importance on integrating technology into their supply chain.
Published on: 11/30/2020
Capstone Headwaters’ 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.  

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