Average M&A Value in Industrial Products Sector Up 25% in 3Q - Modern Distribution Management

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Average M&A Value in Industrial Products Sector Up 25% in 3Q

Total deal value increased even though slightly fewer deals were completed.

Total value for M&A deals over $50 million in the global industrial products industry increased 23.3 percent from the second quarter to the third despite a slight decrease in deal volume, according to a new analysis by PricewaterhouseCoopers LLP.

The study found that the 169 transactions made in the industrial products sector during the third quarter totaled $65.7 billion, compared to only $53.3 billion for 171 deals in the previous quarter. The average value per deal increased 24.7 percent to $388.8 million.

In industrial manufacturing, six mega deals with a disclosed value of $1 billion or more were made or announced. Strategic investors accounted for the majority of industrial manufacturing deals, but financial investment has also been relatively strong in 2013.

“In the third quarter, we witnessed a decline of involvement from financial investors across every sector. The exceptions were the A&D and industrial manufacturing sectors where PE firms are looking for opportunities to exit their investments made just before the economic downturn,” said Robert McCutcheon, PwC’s U.S. industrial products leader.

Local market deals continued to account for most of the activity in industrial products, with 63 percent of deals being local. “We saw companies continue to pursue smaller, local market transactions and focus on internal investment in an effort to boost organic growth in the third quarter,” McCutcheon said.

The PwC analysis, which used transaction data from Thomson Reuters, spanned the aerospace & defense, chemicals, engineering & construction, industrial manufacturing, metals and transportation & logistics sectors.

Get the latest on merger and acquisition activity in distribution and manufacturing.

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