Smaller, local deals drove Q1 M&A activity in industrial and manufacturing sectors. Will this trend continue?

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May 6, 2014

 

By Robert McCutcheon, Partner, US Industrial Products Sector Leader

An increase in smaller, local deals helped drive a significant increase in the value of mergers and acquisitions (M&A) in the global industrial products (IP) sector in the first quarter of 2014, as compared with the same period in 2013. That’s according to PwC’s latest quarterly analysis of deals in six sectors: aerospace and defense, chemicals, engineering and construction, industrial manufacturing, metals, and transportation and logistics.

Overall, there were 156 transactions worth $50 million or more, totaling $64.7 billion, in the first quarter of 2014, compared with 159 deals and $54.6 billion in total value during the first quarter of 2013. Transportation and logistics led the way with 37 transactions worth $50 million or more, totaling $16.1 billion, followed by industrial manufacturing (33 deals totaling $14.7 million) and engineering and construction (32 transactions valued at $15.2 million).

Mega deals were also on the rise during the first quarter of 2014, with 18 mega deals worth $34.9 billion, compared with 13 mega deals worth $24.6 billion in the first quarter of 2013. In the chemicals sector, five mega deals were valued at $6.4 billion during the first quarter, while engineering and construction, industrial manufacturing, and transportation and logistics each recorded four mega deals.

Going forward, M&A activity in the IP sector is expected to be robust. As the overall global economic recovery continues to take hold and more established markets gain their footing, we believe the IP space will see an increase in deal activity as companies ultimately recognize the need to participate in faster-growing markets globally.

Will the industry see continued increase in deal activity for the rest of 2014?

Click here for more information on first quarter deals in industrial products.

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