Engineered Components M&A Industry Update | August 2024

In this M&D M&A Industry Update, we explore the M&A activity and projections for the Engineered Components sector within the M&D industry. Our Manufacturing & Distribution Practice experts share their insights on the current state of the Engineered Components M&A market and look at the factors influencing the broader M&D industry.

Select Insights:

• • M&A deal volume in the Engineered Components (“EC”) vertical was down by 8.9 percent in the LTM 2024 period (through June). While down, this trend compares favorably with overall M&A volume which was down 17.5 percent during the same timeframe.
  • As they always do in times of uncertainty, investors seek investment in the more stable segments of our economy and EC companies fit the bill. Manufacturing M&A is certainly being encouraged by near- and on-shoring as well as advancements in manufacturing technologies.
  • Valuation multiples in the EC vertical held steady, averaging 8.5x EBITDA during the last several quarters. We expect similar results in the near and medium term.
  • Publicly traded EC companies continue to outperform the broader market. Our Objective EC Index has far surpassed the Russell 2000 over the last five years (see Chart III, p3 and Table I, p4) showing that EC companies are generally an attractive vertical in which to invest.
  • The “advance” estimate for real GDP in Q2 2024 registered 2.8 percent. Many economists expect the economy to slow from here but remain positive, at least in the near-term.

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If you are interested in discussing any of the analysis from this report, or if you would like to discuss your own transaction goals contact the Managing Directors from our M&D Industry Practice below, or reach out at (800) 849-7010 or [email protected] to be directed to the appropriate team member.