Mar 11, 2021

BDO: supply chain resilience key for M&A in manufacturing

M&A
SmartManufacturing
Finance
Supplychain
Georgia Wilson
2 min
Manufacturing factory, robotics, manufacturers
Latest report from BDO reveals the UK manufacturing M&A market will remain active in 2021...

Driven by the desire to make supply chains more resilient, BDO’s latest report - Manufacturing Deal Review 2020 - reveals that the manufacturing M&A market will remain active in 2021. 

M&A trends in manufacturing

Within the report BDO details that as a result of the supply chain vulnerabilities exposed following the pandemic and BREXIT, there is likely to be an increased appetite for deals that allows organisations to onshore, re-shore or near-shore supply.

Other driving forces identified include corporations expecting to reposition themselves by making strategic acquisitions that diversify their markets and technologies, as well as the impact 2020 has had on sub-sectors that are ready for consolidation.

“Deal activity held up remarkably well in 2020, and the market looks set to remain active in 2021. Many corporates have significant cash reserves to invest and private equity firms sitting on considerable stores of dry powder are competing to acquire quality manufacturing businesses that have proven their resilience over the last year,” commented Roger Buckley, UK Industrials Mergers & Acquisitions Partner at BDO.

Report findings

Interests in M&A activity in manufacturing was resilient in 2020, with almost 600 deals completed. Whilst a 13% decrease compared to 2019, BDO attributes the decline to the Q2 lockdown where deals dropped by 55% compared to Q1. M&A activity did however increase by 45% in Q3 and 91% in Q4.

During 2020, engineering remained the most active sub-sector, accounting for 26% of deals, followed by food and drink (13%), building products (12%) and life science (12%), which was the fastest growing sub-sector with deal volumes rising 68%.

“After the challenges of 2020, it’s unsurprising that many manufacturers are reviewing their supply base and we anticipate market movement as operators take steps to reshape supply chains. The pandemic has also focused minds on how markets will develop over the longer term, with corporates positioning themselves for a different future in which digitalisation, automation, sustainability and ESG appear higher on the agenda,” added Buckley.

For more information on manufacturing topics - please take a look at the latest edition of Manufacturing Global.

Follow us on LinkedIn and Twitter.

Share article

May 11, 2021

Four Factory of the Future Market Trends to Keep an Eye on

AI
Automation
DigitalFactory
SmartManufacturing
Georgia Wilson
2 min
Factory of the Future | Smart Manufacturing | Technology | Digital Factory | Digital Transformation | Innovation
Manufacturing Global looks takes a look at the latest market trends in smart manufacturing, industrial automation, smart factory and AI...

Global Smart Manufacturing Market

Attributed to the rapid growth in the adoption of automated systems in industrial processes, the global smart manufacturing market is predicted to grow from US$$175bn (2020) to US$303bn by 2026 with a compound annual growth rate (CAGR) of 6.4% between 2019 and 2026.

While COVID-19 has somewhat slowed down the market’s growth, it is expected that by the second to third quarter of 2023 there will be a ‘considerable’ rise in growth for the market. 

Key players in the industry: Schneider Electric, General Electric, Siemens, Honeywell International Inc., Rockwell Automation Inc., FANUC Corporation, and Emerson Electric Co. 

Industrial Automation Market

Making people’s lives easier, and their work more accurate and effective, the global demand for automated technologies such as robotics - especially in science and technology - is driving its increase in global market value.

By 2027, the global industrial automation market is expected to reach US$326.14bn by 2027, with a CAGR of 8.9% between 2020 and 2027.

Key players in the industry: ABB, Siemens, General Electric, Schneider, Endress+Hauser, Yokogawa, Honeywell, WIKA, Azbil, Fuji Electric, 3D Systems, and HP.

Smart Factory Market

Expected to grow from US$80.1bn (2021) to US$134.9bn by 2026, the smart factory market - with a CAGR of 11% between 2021 and 2026 - is experiencing growth driven by fiscal policies adopted to keep manufacturing facilities afloat during COVID-19. 

Other driving factors include resource optimisation, cost reduction in production operations, increased demand for industrial robotics, rising demand for technologies, and the growing significance of energy efficiency. 

Key players in the industry: Emerson Electric Co., General Electric, Rockwell Automation, Inc., Schneider Electric SE, ABB Ltd., Siemens AG, Mitsubishi Electric Corp., Honeywell International Inc., Endress+Hauser AG, and Yokogawa Electric Corp.

Artificial Intelligence (AI) in Manufacturing Market

“It is undeniable that the manufacturing industry is at the forefront of artificial intelligence implementation,” says Analytics Insights. “Manufacturers are using AI-powered analytics to increase performance, product quality, and employee protection, from substantial reductions in unplanned downtime to better crafted goods.”

As manufacturers look to realise the potential benefits of artificial intelligence (AI) in their processes, it is predicted that the AI in manufacturing market will grow to US$11bn by 2025 with a CAGR of 54.6%.

Share article