GCG’s Q1 2023 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 continued to yield positive returns among public equities during Q1 2023, and all but one of the segments GCG tracks meaningfully outperformed the general market on a 3-year basis. The Industrials sector is continuing to experience further stability in raw material prices, freight costs, and wages, and more normalized lead times in their supply chains, with customer demand remaining healthy.
- The volume of M&A activity in the Industrials sector during the first quarter of 2023 declined, with 210 closed transactions, compared to 254 during the last quarter of 2022. Average deal value (based on reported transaction value) increased by over $9.5M compared to the prior quarter, to $154.5M.
- The General Industrial Manufacturing category continued to lead M&A activity, accounting for 37.6% of total transaction volume. Polymers, Chemicals & Plastics Manufacturing represented the next most active segment again, accounting for 17.1% 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 11.0x EBITDA and 1.9x Revenue during Q1 2023, representing marginal fluctuations over the prior quarter.
Click here for the full update.