Manufacturing M&A – 2020 Mid-Year Review Part 1

Manufacturing M&A - 2020 Mid-Year Review
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2020 has been a year of unexpected events, and the M&A world has been doing its best to ride the waves. According to PWC’s Industrial manufacturing deals insights, deal volume and deal value are both down from previous quarters, but the IBBA’s Market Pulse Report indicates that manufacturing companies are still among the highest value deals. More than anything, COVID has caused major delays to in-process deals as lenders were swamped with government PPE. Many lenders have additionally changed their structure to be more conservative. Deals are expected to pick up in the second half of 2020. Below are some highlight transactions in relevant sectors for our Manufacturing M&A - 2020 Mid-Year Review.

M&A in Plastics

Plastic injection molding is a market expected to grow due to the constantly changing needs in healthcare and demands for eco-friendly packaging. Deals have continued internationally despite world events. One such international deal is the acquisition of Tool & Plastic Industries Ltd. in Ireland by Technimark. Technimark is a North Carolina plastic injection molding company specializing in custom rigid plastic solutions in various industries. They have multiple global locations already, and the acquisition of Tool & Plastic’s Ireland and Czech Republic facilities will increase Technimark’s footprint across Europe.

Locally, Michigan-based Revere Plastics has continued its expansion, acquiring multiple plants from Wisconsin-based Techniplas. Techniplas was nearing the end of a sale deal to a private equity in May when COVID-19 struck and the deal fell through. Shortly after, the company filed for Chapter 11. Revere made the purchase through bankruptcy sale, and will expand its offerings into the southeast.

Swedish plastics manufacturer Nolato has agreed to acquire GW Plastics. GW Plastics specializes in plastic molded parts for medical applications. Both companies already have a strong global presence, and this merger will serve to strengthen Nolato’s foothold in North America. GW will continue to operate as its own entity under the Nolato Group. This deal is expected to close in September 2020.

Accelerated Manufacturing Brokers currently have listed a plastic injection molding company that is the sole manufacturer of a critical part to the electrical industry. The company additionally specializes in screw machine products and CNC milling and turning, making it a one-stop-shop for multiple services. A new contract in 2020 will add $816K to sales and $507K to the net. For more information, see our listing page here.

M&A in Gear Manufacturing

Gear manufacturing saw some consolidation in Germany earlier this year as international deals have continued to close. EMAG acquired Scherer Feinbau just earlier this month. The EMAG Group is a global company offering a wide variety of machining solutions in over a dozen countries. Scherer is an expert in vertical CNC lathes. The acquisition will result in increased capabilities for EMAG and increased market reach for Scherer products. With this addition, EMAG will be “one of the few manufacturers that can cover the entire process chain,” according to EMAG Group’s CEO.

ACCEDIA Group, a German holding company, has acquired ASI Drives in Montgomeryville, PA. ACCEDIA is building a strong portfolio of gearbox and gear drive companies to better serve the automotive market. They expect the synergy of ASI and German portfolio company Tornado Drives to be a strategic driver for growth.

Accelerated Manufacturing Brokers currently has listed a Power Transmission Component and Gear Manufacturer serving industries from aerospace to food manufacturing. They are one of the most diversified manufacturing plants in the nation with broad capacity capabilities. Their speed and variety of production allow them to boast 50% gross margins. For more information, see our listing page here.

M&A in Tool & Die

In the tooling industry, DGI Supply will acquire Production Tool & Supply. DGI, a DoALL Company, is an international distribution company servicing the industrial products and machine tools. The DoALL family also includes manufacturers of sawing and grinding products.  Production Tool & Supply located in Rockford, IL, is another expert in industrial distribution, specifically grinding wheels and cutting tools. DGI has been steadily making acquisitions since 2012. The acquisition of Production Tool & Supply will be the newest addition to over two dozen locations under DGI Supply across North America.

Because of our recent transactions in this sector where we received multiple offers, Accelerated Manufacturing Brokers is currently seeking new clients in the tool and die space. We have several qualified buyers actively searching for acquisition in tool and die. If you are looking to sell, please fill out our Seller Registration or reach out to start the process.  Stay tuned for Part 2 in this Manufacturing M&A - 2020 Mid-Year Review.

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