CLEVELAND, Oct. 19, 2021 /PRNewswire/ -- An appetite for scale and technology, among competitive pressures, is continuing to drive consolidation in Industrial Distribution and fueling a robust M&A market, according to an industry report released by the Industrial Distribution investment banking team from Brown Gibbons Lang & Company (BGL).
Scale and technology, among competitive pressures, is continuing to drive consolidation and fueling a robust M&A market.
Access the BGL Industrials Insider: https://bit.ly/BGLIndDis
BGL examined current dynamics in Industrial Distribution, a market seeing improving business conditions and a return to growth aligned with steady expansion in the U.S. manufacturing sector:
- Macroeconomic indicators have strengthened and point to favorable market conditions. The U.S. economy is growing, with Industrial Distribution expected to see double-digit revenue gains in 2021, supported by broad-based demand and growing backlogs. Agile distributors with diversified portfolios and end markets, as well as strong balance sheets, have continued to perform.
- In line with the rally in the overall M&A market, Distribution deal flow has maintained a brisk pace. Strategic and financial buyers are actively pursuing acquisitions to build scale through an expanded geographic footprint and product portfolio, increase value-added product mix, and/or gain access to technology to broaden the scope of products and solutions offered to customers. Building Materials best illustrates the hot Industrials M&A market, with the sector seeing several bellwether acquisitions involving notable targets such as Foundation Building Materials (American Securities), US LBM Holdings (Bain Capital), PrimeSource (Clearlake Capital Group), and BMC Stock Holdings (Builder's FirstSource), which underscore high demand for quality assets.
- Technology is also driving Industrials M&A as participants respond to digital competition and move to a more responsive distribution model. Suppliers of automation and eCommerce capabilities are garnering increasing attention with Applied Industrial Technologies (R.R. Floody Company), Graybar Electric (Shingle & Gibb Automation), and Builder's FirstSource (WTS Paradigm) among the buyers to recently announce transactions.
We expect Industrial Distribution M&A activity to continue with the strong capital markets environment and record low interest rates providing the necessary support. Appetite for deal flow in the private equity and lending communities is strong. Balance sheet strength will sustain corporate buying activity, and acquisition pipelines are building.
About Brown Gibbons Lang & Company Brown Gibbons Lang & Company (BGL) is a leading independent investment bank and financial advisory firm focused on the global middle market. The firm advises private and public corporations and private equity groups on mergers and acquisitions, divestitures, capital markets, financial restructurings, valuations and opinions, and other strategic matters. BGL has investment banking offices in Chicago, Cleveland, and Philadelphia, and real estate offices in Chicago, Cleveland, and San Antonio. The firm is also a founding member of Global M&A Partners, enabling BGL to service clients in more than 30 countries around the world. Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC. For more information, please visit www.bglco.com.
View original content to download multimedia: https://www.prnewswire.com/news-releases/the-bgl-industrials-insider----scale-technology-and-competitive-pressures-drive-industrial-distribution-ma-301403792.html
SOURCE Brown Gibbons Lang & Company