GCG’s Q4 2022 Industrials Industry Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples, and the state of the middle-market M&A environment.
Key findings include the following:
- The Industrials sector yielded positive returns among public equities during Q4 2022, and half of the segments GCG tracks have meaningfully outperformed the general market on a 3-year basis now. In the past several months, the Industrials sector has observed more stability in raw material prices, freight costs, and wages, and has benefitted from greater visibility in lead times across its supply chain, while customer demand remains strong. Many of these factors are leading investors to a more opportunistic outlook across the sector.
- The volume of M&A activity in the Industrials sector during the fourth quarter was slightly lower, with 241 closed transactions, compared to 250 during Q3 2022. Average deal value (based on reported transaction value) increased compared to the prior quarter.
- The General Industrial Manufacturing category once again lead M&A activity, accounting for 32.4% of total transaction volume. Polymers, Chemicals & Plastics Manufacturing represented the next most active segment, accounting for 17.8% of total transaction volume.
- Based on a representative set of publicly traded companies in the Industrials sector, public companies traded at an average multiple of 11.4x EBITDA and 1.8x Revenue during Q4 2022, representing slight increases over the prior quarter.
Click here for the full update.