By: Duane Donner
A large subset of Industrial verticals were able to find success during 3Q 2016 even though the price of crude oil and other major commodities remained weak. The construction and engineering segment is a great example. The success of this vertical came from end markets such as healthcare, infrastructure, and aviation.
Many sectors await a rise in the price of crude oil and other commodities for segments of their business. Founders recently collaborated with Spears & Associates on the timing of such a return, shown in the chart below. The analysis predicts the timing and amount of new domestic oil wells that will be needed to support expected growth in production. Increased investment and activity in oil & gas should be felt in many industrial business lines as the end market has a surprisingly far reaching impact in today’s global economy.
“Our Industrial [line of business] showed the most improvement in segment operating profit… followed by Buildings & Infrastructure and Aerospace & Technology…These improvements more than offset the challenges we faced in Petroleum & Chemicals” – Steven Demetriou, CEO of Jacobs Engineering Group
In the 3Q 2016 Industrials market update, we look at industry trends, public company valuation data, and recent transactions:
Founders Investment Banking (Founders) is a merger, acquisition & strategic advisory firm serving middle-market companies. Founders’ focus is on oil and gas, SaaS/software, industrials, internet, digital media and industrial technology companies located nationwide, as well as companies based in the Southeast across a variety of industries. Founders’ skilled professionals, proven expertise and process-based solutions help companies access growth capital, make acquisitions, and/or prepare for and execute liquidity events to achieve specific financial goals. In order to provide securities-related services discussed herein, certain principals of Founders are licensed with M&A Securities Group, Inc. or Founders M&A Advisory, LLC, both members FINRA & SiPC. M&A Securities Group and Founders are unaffiliated entities. Founders M&A Advisory is a wholly owned subsidiary of Founders. For more information, visit www.foundersib.com.