Over the first half of 2011, increased levels of M&A activity occurred within the industrials sector, which we define as companies manufacturing or distributing capital goods, construction, defense, electrical equipment, heavy machinery, and other physical asset categories. In fact, industrials was the most active sector within the AxialMarket network, accounting for 33 percent of activity. We see this reflected in the public sector as well: in the last 12 months, the S&P 500’s industrial sector returned 35 percent.
Given these high-level trends, we have released a report analyzing deal activity that originated on the AxialMarket network within the industrial sector based on region, industry, revenue, and EBITDA:
• Nearly 600 active companies within the AxialMarket network have gone to market in the Industrials sector, ranging in company size from $1 million to $430 million in revenue, both within the United States and abroad.
• The US West region had the highest average revenue of Industrials companies (approximately $18 million), followed by the US South (more than $17 million).
• Construction & engineering was the top industry in industrials in the first half of the year, with a 24 percent increase in aggregate revenue of opportunities created on AxialMarket.
• Across all regions (including International), the aggregate total pursuits by buyers significantly outnumbered the number of companies being brought to market. This indicates a continued high demand for Industrials companies, most prominently in the US South region, where AxialMarket members put in over 1,000 Pursuits on just over 200 companies.
• As a company’s EBITDA approaches $10 million, pursuits increase to over 10 per opportunity.
• Member demand, as measured by pursuits, rallied around the US South for Industrials companies with 40% of total pursuits.
• Post-revenue companies seeking growth equity capital had the highest average revenue (nearly $50 million) and average EBITDA (nearly $4 million) in the first half of the year.
• In the first half of 2011, the buyout/acquisition transaction type was most popular within the Industrials category. 78 percent of opportunities fall under this transaction type.
AxialMarket is an online network used by over 3,000 member companies actively engaged in buying, selling, lending to, or advising private companies. On a monthly and quarterly basis, AxialMarket Research publishes reports on deal activity based on analysis of overall network activity.