By: Duane Donner
M&A transactions in the Industrial sector rose 1.2% in 2017 year over year. The pickup in activity was encouraging given the industry has seen a decline in transactions the previous two years. Although the scarcity of quality businesses willing to go to market has driven this shortage, this trend has positively impacted valuations. Buyers bidding over fewer businesses has caused median EV/EBITDA multiples to rise to a 10-year high of 10.1x in 2017.
The state of the Industrial M&A market is largely dependent on the health of the U.S. economy. As Founders looks ahead to 2018, we’re encouraged by the strong macroeconomic outlook. The Conference Board estimates that GDP and Consumer Spending will rise 2.9% and 2.8%, respectively in 2018. Industry professionals site that favorable dynamics enabled by the recently passed tax reform and the general state of the U.S. economy will be key drivers of this growth.
For more information on how tax reform will impact your business, industry transactions, and key leading indicators of the Industrial M&A market, please click here to view our Q1 2018 Industrials newsletter.
About Founders Advisors
Founders Advisors (Founders) is a merger, acquisition, & strategic advisory firm serving middle-market companies. Founders’ focus is on energy, SaaS/software, value-added distribution, industrial technology, internet, healthcare, and digital media 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 of member 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, please visit www.foundersib.com.