The Source

Source Talks is a series where we discuss deal origination with PE and M&A pros, in collaboration with David M. Toll.

In this episode, we speak with John Novak, Head of Investment Development and Capital Markets at Paine Schwartz, about the firm’s specific industry focused investment strategy and the importance of technological development.

Investor sentiment around private equity deal activity continues to paint a mixed picture. Economic uncertainty, higher-for-longer interest rates, and geopolitical tensions have created an environment of heightened caution. While the two-year decline in deal activity appears to be leveling off, the rebound remains sluggish.

SPS by Bain & Co.’s 2024 Deal Sourcing Databook has captured the highs and lows of private equity activity in the last five years, from doldrums in the first year of the COVID-19 pandemic, to heady activity from pent-up demand the following year to another slouch once central bank rates began rising in 2022.

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.