Plant engineering, manufacturing M&A: December 2022

In this article for Plant Engineering Magazine, Bundy Group provides an update on mergers & acquisitions and capital placement activity for companies that address the manufacturing and plant management fields.

After a busy year in the industrial, automation and plant maintenance sectors, we wanted to provide observations on activities and trends occurring in these rapidly evolving industries. The foundation for our feedback includes:

• Current Bundy Group client engagements in which our team is advising companies that offer automation, electrical, and mechanical engineering services as well as deliver plant maintenance and management solutions to industrial and manufacturing clients.
• Continual tracking of mergers and acquisitions and capital placement activity in sectors relevant to the Plant Engineering audience.
• The numerous conversations I have each week with owners, executives, strategic buyers, financial sponsors (i.e. private equity groups and family offices) and other industry professionals.
• Bundy Group’s attendance at, and involvement with, such conferences as Automate, Rockwell Automation Fair, Electrical Apparatus Service Associations, Control System Integrators Association, and the International Manufacturing Technology Show.

Four observations on the state of the industry

1. Valuation multiples hold strong: While buyers are in the business of acquiring solid companies at low valuations, they can pay… and are paying… seller-friendly valuation multiples. That being said, buyers only pay high multiples when they are forced to do so under the threat of competitive pressure. As an example, in a 2021 Bundy Group maintenance repair and automation transaction, we kicked a strategic buyer out of our managed process three times. Ultimately, the buyer came back with “hat in hand” and presented a transaction-winning offer for our client’s business.
2. Outsourced plant maintenance services: This active segment continues to be a key investment area for buyers and financial sponsors. With industrial companies finding it difficult to hire and retain talent, and with never-ending maintenance and upgrade requirements at production facilities, plant maintenance service providers are as busy as ever. As an example, Bundy Group is currently representing a plant maintenance services firm in a sale. The company is servicing Fortune 500 industrial firms with a focus on ensuring the customer facilities and plant floors remain safe and fully operational. Our client has a strong growth track record and is witnessing the strongest demand management has seen in its 30+ years in business.
3. Cybersecurity is a growth area: Whether it be systems integrators, technology platforms or manufacturers, providers understand the market demand to incorporate cybersecurity solutions in conjunction with their automation and monitoring offerings. Furthermore, because the cybersecurity sector is a massively growing market, any Plant Engineering subscriber that can deliver cybersecurity solutions can expect to see a positive impact on his or her company’s business valuation.
4. Overabundance of buyers in the industrial automation sectors: Consolidation and investment in the industrial automation sector continue at a rapid pace. Furthermore, the “secret is out” about this attractive market, which is luring these buyers of all types. The result is that there is significantly more buyer demand than supply of available acquisition opportunities in the industrial automation sector.

As we begin 2023, the Bundy Group team continues to see strong buyer interest for independently-owned businesses that address the manufacturing and plant maintenance markets. The executives and owners that are affiliated with these organizations should monitor these trends. The result of these market activities could be enormous value creation opportunities for companies that provide industrial, plant maintenance and automation solutions.

December mergers and acquisitions

11/14/22

Tri Tech Automation, a turnkey industrial automation systems integrator in Moscow Mills, Mo., purchased Integrity Control Solutions (ICS), a panel fabrication and installation firm in Broken Arrow, Okla. Learn more.

11/11/22

The Middleby Corporation (NASDAQ: MIDD) acquired Escher Mixers, a designer and manufacturer of highly-engineered spiral and planetary mixers for the industrial baking industry. Learn more.

11/10/22

Electrical solutions provider Feyen Zylstra announces that its Industrial Tech division has been acquired by ATS Global, an international smart digital transformation company headquartered in Michigan, USA and Haarlem, The Netherlands. Learn more.

11/9/22

Krones, a leading manufacturer of filling and packaging solutions, has acquired a majority stake of R+D Custom Automation LLC (R+D). Based in Trevor, Wisconsin, R+D supplies machinery and equipment for the production and filling of containers for the pharmaceutical industry. Learn more.

11/3/22

RōBEX LLC (“RōBEX”), an innovative provider of robotics and industrial automation solutions, has acquired Vantage Corporation (“Vantage”), a Michigan-based industrial robotics manufacturer and integrator. Learn more.

11/2/22

Watlow, a designer and manufacturer of complete industrial thermal systems, has completed its acquisition of Eurotherm from Schneider Electric Company, the global leader in the digital transformation of energy management and automation. Learn more.

11/2/22

WiseTech Global (ASX:WTC), developer of leading logistics execution software CargoWise, acquired Shipamax, an industry-leading provider of data entry automation software for the logistics industry. Learn more.

10/21/22

Dorsett Controls, an industrial technology company and industry leader that manufactures advanced supervisory control and data acquisition (SCADA) systems software and hardware, has acquired Sunapsys, a Virginia-based system integrator who specializes in the design and implementation of controls and information systems in the water and wastewater market for municipalities, manufacturers, and OEMs. Learn more.

10/5/22

Leadec, the leading global service specialist for factories, has acquired Elmleigh Electrical Systems Limited as of 09/30/2022. Elmleigh is a process automation specialist and systems integrator for blue chip customers, including some of the largest operators in the food and beverage and parcel distribution sectors throughout the UK and Europe. Learn more.

7/6/22

IPS, a North American leader of single-source solutions for industrial and commercial power and mechanical processes, has acquired Tampa Armature Works, Inc. (TAW). The sale includes all eleven TAW locations serving customers in the Southeastern U.S., Caribbean, South America, and internationally. Learn more.

6/28/22

Downey Engineering in Toowoomba has been acquired by SAFEgroup Automation. Downey Engineering are the leading system integrator on the Darling Downs, with an incredible depth of experience in Rockwell, Schneider, Siemens, Omron automation platforms and Ignition SCADA. They are the leading provider of solutions to Agriculture, Mining, Manufacturing, Food & Bev, Energy, Infrastructure and Water clients across the region and beyond. Learn more.

6/22/22

CORE Industrial Partners (“CORE”), a manufacturing, industrial technology, and industrial services-focused private equity firm, announced today the acquisition of GoProto (“GoProto” or the “Company”), a provider of custom manufacturing services with a comprehensive suite of both additive and traditional manufacturing technologies.  The acquisition combines GoProto with CORE portfolio company RE3DTECH to form an additive manufacturing platform focused on production parts utilizing Industry 4.0 capabilities. Learn more.

5/24/22

Bettcher Industries (“Bettcher”), a leading manufacturer of protein processing equipment and owned by private equity fund KKR,  announced the signing of a definitive agreement under which it will acquire Frontmatec (the “Company”) from Axcel. Headquartered in Kolding, Denmark, Frontmatec is a global manufacturer of end-to-end automated solutions for pork and beef processing, with world-class robotics and vision system capabilities. The Company serves as a full line supplier of processing equipment, parts and services, instruments, and software, which help solve key issues around food and worker safety. Learn more.

Bundy Group is a CFE Media and Technology content partner.

Related Articles

• Automation mergers, acquisitions, capital markets analysis: November 2022
• Automation mergers, acquisitions, capital markets analysis: October 2022
• Automation mergers, acquisitions, capital markets analysis: September 2022