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What Is My Manufacturing Business Worth – A Look At Current Merger & Acquisition Activity

Acquisition activity
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Merger and Acquisition Activity in the industrial manufacturing sector rose by 20% during the second half of 2013 according to an annual survey by PwCUS.

PwC’s industrial manufacturing M&A analysis is a quarterly report of announced U.S. transactions with value greater than $50 million analyzed by PwC using transaction data from Thomson Reuters. According to the report, deal activity in the second half of the year increased with 83 deals worth $35.7 billion versus 69 deals for $24 billion in the first half. During the fourth quarter of 2013, there were 40 transactions worth $50 million or more, totaling $9.7 billion, compared to 44 deals worth $20.3 billion in the same period last year.

A good source of information on smaller transactions is the BizBuySell Insight Report, which is a nationally recognized economic indicator that tracks the health of the U.S. small business economy and acquisition activity. Each quarter, BizBuySell analyzes sales and listing prices of small businesses across the United States based on approximately 45,000 businesses for sale and those recently sold. According to the report, business transactions grew 49 percent in 2013 compared to 2012. The full-year totals represent the first year of extreme improvement in the business-for-sale industry since levels reached record lows in mid-2009.

In addition to full-year totals, BizBuySell.com reported a strong fourth quarter to end 2013. Total small business transactions increased 38 percent over the fourth quarter of 2012. This comes after 56 percent growth in Q1 of 2013, 62 percent in Q2, and 42 percent in Q3.

Will these trends continue for 2014?  Many experts say that conditions are ripe for continued growth, which will be aided by the following factors:

  • A healthy Stock Market
  • A recent increase in international M&A activity
  • Favorable credit markets which allow for higher leverage levels
  • Increase corporate cash on books
  • Retiring Baby Boomers providing a healthy inventory of available businesses 

US companies have used a variety of methods to maintain earnings since the 2008 depression.  As a result of increased productivity and expense slashing, they’re now cash-rich and ripe for expansion.

Merger & Acquisition activity provides attractive returns AND expansion into new sectors without taking years to build brand and customer base.

While there is still some economic uncertainty, companies are actively seeking growth through acquisition. Business Brokers and M&A firms are reporting a flurry of activity during the first two months of this year. All indications point to 2014 being a banner year for Merger and Acquisition activity.

Are you looking for acquisitions in the manufacturing sector?  Take a look at our Listings or fill out our Buyer Registration form.  If you’re a seller looking to retire or exit, contact us for a complimentary consultation.

About Frances Brunelle

Frances Brunelle is the founder of Accelerated Manufacturing Brokers, Inc., which specializes in the sale of lower middle-market manufacturing companies nationally. Fran and her team help to ensure the continuity of U.S. Manufacturing by transitioning ownership to the next generation of entrepreneurs. Recently Fran was named to 2020 Most Influential Women in Mid-Market M&A (Mergers & Acquisitions). Fran is also the host of the WAM (Women and Manufacturing) podcast, a Jacket Media production. Fran writes on topics that help manufacturing business owners prepare their companies for sale and navigate the sale process to ensure a positive financial result in support of their retirement.

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