Brown Gibbons Lang (BGL): Private Equity Eyes Plastics Growth
The BGL Plastics & Packaging Insider report discusses key trends and issues affecting the industry, as well as recent mergers and acquisitions activity, and the recent performance of publicly-traded companies.
CHICAGO and CLEVELAND and PHILADELPHIA, April 14, 2016 /PRNewswire/ -- The plastics industry is seeing continued strength, with segments outperforming the broader industrials market, according to the Plastics & Packaging Insider, an industry report that can be accessed HERE, released by Brown Gibbons Lang & Company (BGL).
The BGL report, now available online, documents continued strong private equity interest in the plastics space, with differentiated businesses in high demand, supported by findings from a roundtable survey of equity sponsors with investments in the industry. The fragmented landscape is conducive to acquisitive growth, with sponsors aggressively pursuing synergistic buys that bring technology and capability expansion and access to new markets. "Of particular interest is a focus on complex parts and sub-assemblies—being a value-added, full service supplier to your customers. Certainly for the larger OEMs, the one-stop shop is very appealing," said Joe Heinen at Goldner Hawn Johnson & Morrison, a participant in the report. "In any of these plastics businesses, you're taking advantage of the fragmentation in the market and the ability to find add-ons for these platforms," added Russ Spieler of Capital Partners.
Medical, aerospace, and automotive are among the markets seeing outsized growth, where underlying demand drivers indicate strong near-term revenue visibility. High quality plastic component and packaging manufacturing assets are receiving strong reception from buyers and lenders which is fueling an active M&A market. OEMs are returning to core competencies and increasingly outsourcing manufacturing functions, looking to suppliers as an extension of their product development and production. Size and scale are of increasing importance to support customers across geographies, particularly as OEMs reduce their supplier bases. These market dynamics are fueling consolidation.
M&A activity involving plastic component manufacturers over the last 12 months included in Newell Rubbermaid (NWL)/Jarden (JAH); NN (NNBR)/Precision Engineered Products; and TransDigm Group (TDG)/Pexco Aerospace Business. Medical plastics saw significant activity including ESCO Technologies (ESE) with two acquisitions (Plastique Group Limited and Fremont Plastics); Pexco (Scientific Plastics and Precision Extrusion), and Technimark (Ci Medical Technologies) among the recent deals.
"There will be continued consolidation. It is largely as a result of customers demanding more, so you will see consolidation among technologies—molding, 3D printing, machining—to build the presence that customers require," said Jud Samuels at New Heritage Capital.
About Brown Gibbons Lang & Company
Brown Gibbons Lang is a leading independent investment bank serving the middle market. BGL specializes in mergers and acquisitions advisory services, debt and equity placements, financial restructuring advice, and valuations and fairness opinions, with global industry teams in Business Services, Consumer, Environmental & Energy Services, Healthcare & Life Sciences, Industrials, and Real Estate. BGL has offices in Chicago, Cleveland, and Philadelphia and real estate offices in Chicago, Cleveland, Irvine, and San Antonio, in addition to Global M&A partner offices in more than 50 countries across 5 continents. BGL is able to deliver to our clients unparalleled access to strategic relationships, investors, and opportunities globally. For more information, please visit www.bglco.com.
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SOURCE Brown Gibbons Lang & Company
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