Through the late summer of 2021, mergers & acquisitions (M&A) and capital markets activity in the automation industry has continued to demonstrate the strength and attractiveness of this rapidly growing segment. The resilience of the industry through the COVID-19 pandemic further reinforced the mission-critical nature of the automation market (see the Bundy Group article entitled “The Controls & Automation Market: Preparing for Growth in the Post-Pandemic Age”). Furthermore, strategic buyers and financial sponsors (i.e. private equity, family offices, growth equity) have recognized the vital role the automation market plays in the global economy, which is driving their appetite to acquire and invest in businesses that provide automation services, products, and solutions. This aggressive buyer and investor demand places business owners in a preferred category, and automation companies that are positioned correctly in a sale or capital raise process maximize their chances for significant interest and premium valuations.
Business sale and capital placement transactions that have occurred through August 2021 are reflective of the heightened interest in the automation industry. An August 2021 control system integration transaction to note is Revere Control Systems’ acquisition of Florida-based Curry Controls, which solidifies Revere as an automation leader in the Southeast. A recent series of 2021 automation manufacturing acquisitions was led by Audax, a Boston-based financial sponsor, which started with the acquisition of SJE followed then by the immediate add-on acquisition of control systems manufacturer LW Allen. In the robotics industry, a subsegment of the broader automation space, Zebra Technologies acquired Fetch Robotics in a $290MM transaction. The transaction value / revenue multiple for the Fetch Robotics deal was an eye-popping 30.0x, which further validates the premium value assigned to many companies in the robotics market. For additional examples, please see below a list of noteworthy 2021 automation transactions.
In summary, 2021 has been a robust year for M&A and capital placement activity in the automation segment. Additional closed transaction announcements are expected through the end of the year and into 2022, and the Bundy Group team sees buyer and investor demand continuing to build for automation firms. The end-result is that independent companies are in an enviable position in terms of strategic options to consider and attractive business valuations to realize.
Bundy Group is a boutique investment bank that specializes in representing controls and automation, Internet of Things, and cybersecurity companies in business sales, capital raises, and acquisitions. Over the past 32 years, Bundy Group has advised and closed over 250 transactions, which includes numerous automation-related transactions.