Industry Reports

Published on: 03/19/2021
Chemicals have played a critical role throughout the pandemic providing inputs for disinfection and sanitation, protective equipment, and medical supplies and equipment.  However, pandemic-induced manufacturing slowdowns and demand shocks have challenged chemical producers in 2020. While specialty chemicals saw depressed demand across nearly all end markets in Q2 and Q3 2020, Capstone expects end market recovery to fuel demand throughout 2021, driving merger and acquisition (M&A) activity.
Published on: 03/18/2021
Capstone has reported that EBITDA multiples of large public waste and recycling companies have returned to pre-pandemic levels driven by sustained demand for waste management and recycling services during the pandemic and recent increases in commercial and residential waste volumes. However, waste and recycling companies continue to face operational challenges due to staffing limitations and social distancing requirements. While merger and acquisition (M&A) activity decreased by 23.1% in 2020 year-over-year (YOY), Capstone expects transaction volume to increase in 2021 as companies continue to consolidate.
Published on: 02/18/2021
In 2020, Building Energy Management (BEM) companies continued to accelerate the convergence of operation technology (OT) and information technology (IT), creating competitive advantages for those that provide technology-driven platforms and solutions.  The shift toward digitized offerings has played a significant role in sustainability initiatives and has fostered significant investment from strategic buyers looking to utilize real-time data analytics and automation to effectively reduce utility costs and deliver eco-friendly energy utilization.
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: 11/18/2020
The EH&S industry has been instrumental in combating the novel coronavirus.  EH&S operators that provide personal protective equipment (PPE) as well as sanitization products and services have seen an unprecedented uptick in demand as states follow suggested Center of Disease Control (CDC) and Occupational Safety and Health Administration (OSHA) guidelines to protect workforces and prevent the virus’ spread. 
Published on: 10/23/2020
The Packaging industry has displayed resiliency during COVID-19, driven by the accelerated adoption of e-commerce, consumer pantry loading, and demand for healthcare, pharmaceutical, and hygiene packaging solutions. Despite a challenging economic climate, packaging providers have continued to attract demand in defensible end markets while experiencing softness in industrial markets and discretionary goods.
Published on: 10/01/2020
The highly fragmented HVACR Services market presents ample consolidation potential, with an extensive supply of small, geographic-centric prospective add-ons. Capstone maintains relationships with an extensive private equity network, which gives us a unique pulse on buyer perspectives and insights in the HVACR industry. In this report, CEO AJ Brown of Alpine Investors-backed Apex Service Partners, and VP of Corporate Development Karan Aggarwal of Ares Management-backed CoolSys, provided Capstone with their perspectives and outlooks on the attractiveness of the HVACR Services market. 
Published on: 09/17/2020
This follows Capstone’s recently advised sales of MMi Sonora to ARCH Global Precision, a portfolio holding of The Jordan Company, and EB Industries, LLC to MCM Capital Partners.  As evidenced by these transactions, private equity (PE) firms have shown a strong appetite for precision manufacturing companies and have comprised almost 60% of buyers in the space year-to-date.
Published on: 09/16/2020
Pre-COVID trends of rapid urbanization and aging water and wastewater infrastructure have been catalysts for innovation and advancement in the Water Infrastructure industry.  While COVID-19 has stressed revenues and financial visibility, it is accelerating the adoption of digital and remote technologies to drive effective asset management, efficiency, and cost reduction in water systems.
Published on: 09/03/2020
Weakened downstream chemicals demand among Automotive, Construction, and General Industrial markets were partially offset by steady demand for synthetic materials for non-wovens in personal protective equipment, disinfectants, pharmaceuticals, and food and beverage ingredients. Global merger and acquisition (M&A) activity in the industry fell 3.6% year-over-year (YOY) through July, with a notable slowdown in May. However, several notable deals in June and July indicate buyers are returning to the table, albeit with tightened criteria and valuation expectations.

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