Industry Snapshot: Electrical Equipment
This month’s Industry Snapshot hones in on the Electrical Equipment and Electronic Components & Automation Industry. Looking at M&A deals for Electrical Equipment, there was a YoY decrease of 13.4% from LTM April 2023 and another decrease of 22.3% in LTM April 2024. Of deals completed, 58% went to PE buyers while 42% went to corporate buyers. Buyouts comprised the bulk of deal types at 46% with add-ons accounting for 41% of deals. In terms of sub-industry activity, deal volume decreased from April 2023 to April 2024 in nearly all segments, except for an increase in the Electrical Components and Heavy Electrical Equipment sub-industries. Lincoln International, Generational Equity, and Robert W. Baird came in at the top three for Sell-Side Intermediaries.
Seizing the Green Wave: Private Equity’s Opportunity in the Clean Energy Transition Market
Renewables and the clean energy transition have emerged as prime investment avenues for private equity investors, marking a significant upward trajectory over the past decade and with expectations for continued growth in the years ahead. As Hugh MacArthur, chairman of the private equity practice at Bain & Co. indicated, “We are already seeing a substantial increase in things like energy transition… an area that a lot of investors are going to pile into as an attractive space.”
Creating Value at a PE Juncture Point: Insights from Bain & Co. 2024 Global PE Report – Part 2
Despite economic fluctuations and geopolitical tensions, PE firms have continued to adapt and thrive with their ability to swiftly pivot strategies, capitalize on emerging trends, and leverage their expertise in navigating complex market dynamics.
Shifting Strategies: Bain’s report highlights the ongoing shift in both investment and exit strategies. Firms are increasingly focusing on sectors with strong growth potential, such as technology, healthcare, and renewable energy, as well as industries that MacArthur refers to as ‘proof’ businesses, meaning businesses that have proven stability through uncertain conditions, i.e. those that are ‘recession-proof’.
Q1 2024 Mezzanine Market Perspective
In Q4 2023, 151 deals including mezzanine debt closed, a 76% increase from the 86 deals closed in Q3 2023. Mezzanine activity during 2023 increased approximately 22% YoY from 371 deals to 454 deals. Despite this increase, private equity deal volume decreased 14% YoY from 6,022 deals in 2022, to 5,164 deals in 2023. Out of the 151 mezzanine deals that closed in Q4 2023, 59 deals were buyouts, 60 were minority financings, 31 were sponsor-backed add-ons, and 1 was a recapitalization. The most common industries in total M&A activity for the quarter were Technology, Industrials, Consumer, and Business Services, respectively.