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Michael Poole

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Industry Trends

Global Conflict Contributes to Surging Gas Prices

Rising gas prices continue to strain U.S. companies and consumers in Q1 2022. Average U.S. gas prices reached $4.17 in March, a year-over-year increase of 50.5% and 6 cents higher than the previous record set in 2008. The Russia-Ukraine conflict is mainly responsible for driving global crude oil prices over $100 a barrel. Another contributing factor is U.S. oil producers’ reluctance to increase production levels with looming possibilities of tighter environmental restrictions cutting future demand.1 2

Demand for Electric Vehicles Increases

Global semiconductors shortages contributed to a year-over-year price increase of 12.4% for new cars and 41.2% for used cars in February 2022. Electric vehicles (EV) have experienced high demand due to gas price increases, with an 87% price increase between January 2021 and 2022. EV demand is expected to continue as the Biden administration unveils a $5 billion plan to fund the EV charging network in February.3 4

Electronic Manufacturers Face Rising Metal Prices

Rising prices for Nickel and Lithium, two key materials for batteries, pose profitability constraints for electronic manufacturers. Nickel prices per ton increased nearly 74% since the beginning of 2022, as fears that Russia, a major nickel producer, will lower or cut supply entirely. Lithium prices increased nearly 500% between March 2021 to 2022 as production is halted from supply chain bottlenecks and environmental restrictions. High metal costs are expected to keep prices high for electric vehicles among other electronics for the foreseeable future.5 6

G.M. Invests in Autonomous Vehicle Company

General Motors is investing a total of $3.45 billion to acquire an 80% stake in SoftBank’s Cruise autonomous vehicle unit as it exits this investment. The investment comes after the recent launch of Cruise’s limited driverless robot-taxi service in San Francisco. GM has indicated plans to keep the company public while it focuses on scaling up the driverless ride-hail service.7 8

U.S. Manufacturing Jobs Grow

Manufacturing job growth continued to accelerate in the first quarter despite continued struggles to source materials. In March, 38,000 manufacturing jobs were added, a 22,000-increase compared to January. Following declines in February, transportation equipment manufacturing experienced the most significant increase, with 10,800 new jobs added. While material sourcing has affected all U.S. manufacturing, wood products production and electronics manufacturing experienced minor job losses as supply chain disruptions continue to affect the industry.9 10

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Sonoco
  • Sonoco Products Company
  • $1,350.00
  • Kaman Distribution Group
  • Motion Industries, Inc.
  • $1,300.00
  • Billerud Americas Corporation
  • BillerudKorsnäs Inc.
  • $809.32
  • Substantially all Assets of Mid-Am Building Supply, Inc.
  • Hardwoods Distribution Inc.
  • $270.00
  • Midwest Paper Group
  • Durango Mckinley Paper Company
  • $204.44
  • Resolute-LP Engineered Wood Larouche Inc./Resolute-LP Engineered Wood St-Prime Limited Partnership
  • Resolute FP Canada Inc.
  • $50.00
  • Spinnaker Coating, LLC
  • Mactac Americas, LLC
  • $40.00
  • Substantially All of Operating Assets of Syfan Manufacturing, Inc.
  • Intertape Polymer Group Inc.
  • $18.00
  • PurePressure, LLC
  • Agrify Corporation
  • $11.77
  • EcoTech Solutions Inc.
  • Viper Networks, Inc.
  • $1.69

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Reverso Pumps, Inc /Separ of the Americas, LLC
  • Crawford United Corporation
  • n/a
  • General Chemical & Supply, Inc.
  • Envoy Solutions, LLC
  • n/a
  • JMI Instrument Company
  • Allied Valve, Inc.
  • n/a
  • Promac, Inc.
  • Ovation Holdings, Inc.
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • JK Enterprise Landscape Supply, LLC
  • SiteOne Landscape Supply, Inc.
  • n/a
  • Packaging Technology Group, Inc.
  • Cold Chain Technologies, LLC
  • n/a
  • Southern Lighting Gallery, Inc.
  • Saylite, Inc.
  • n/a
  • Integrated Machinery Solutions, LLC
  • DeShazo Crane Company, LLC
  • n/a
  • Crabtree Siding and Supply
  • Beacon Roofing Supply, Inc.
  • n/a
  • K-T Bolt Mfg. Co.
  • Birmingham Fastener & Supply, Inc.
  • n/a
  • Bass Flexible Packaging, Inc.
  • C-P Flexible Packaging, Inc.
  • n/a
  • E-Roots System.
  • ZA Group Inc.
  • n/a
  • CMH Solutions, Inc.
  • Tom Barrow Co., Inc.
  • n/a
  • State Industrial Supply, Inc.
  • A&M Industrial Inc.
  • n/a
  • Pioneer Packaging Inc.
  • B2B Industrial Packaging LLC
  • n/a

 

Source S&P Capital IQ as of 4/4/2022 and PCE Proprietary Data

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PCE Transactions

Contacts

Michael Poole

Orlando Office

407-621-2112 |

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Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. “Short-Term Energy Outlook.” U.S. Energy Information Administration, 8 Mar. 2022.
  2. Gas prices in the US hit a record as Russia continues to invade Ukraine - CNN.
  3. Patterson, Scott. “High Gasoline Prices Have Consumers Thinking Electric.” The Wall Street Journal, 23 Mar. 2022.
  4. Shepardson, David. “U.S. Unveils $5 Bln Plan to Fund EV Charging Network.” Reuters, 10 Feb. 2022.
  5. Patterson, Scott. “High Gasoline Prices Have Consumers Thinking Electric.” The Wall Street Journal, 23 Mar. 2022.
  6. Goldman Sachs Research. “Batteries: The Greenflation Challenge.” Goldman Sachs, 8 Mar. 2022.
  7. Wayland, Michael, et al. “GM to Buy SoftBank’s Stake in Cruise Self-Driving Unit for $2.1 Billion.” CNBC, 18 Mar. 2022.
  8. Shepardson, David, and Hyunjoo Jin. “GM Bets $3.5 Billion More on Self-Driving Tech Unit as SoftBank Exits.” Reuters, 18 Mar. 2022.
  9. ISM Report, BLS Data Show March Growth in Manufacturing | IndustryWeek.
  10. February Adds 36,000 Manufacturing Jobs as Most Industries See Growth | IndustryWeek.
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