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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

Supreme Court Limits Agency Power, Ends Chevron Doctrine

The Supreme Court's decision on June 28, 2024, to overturn Chevron's deference introduces uncertainty by shifting interpretive power from federal agencies to the judiciary. This change may result in varying regulatory landscapes across states: some jurisdictions might interpret ambiguous laws less restrictively, potentially easing compliance burdens for industries like auto manufacturing, industrial manufacturing, and chemical companies. Conversely, other states could adopt stricter interpretations, complicating compliance efforts and necessitating companies to navigate differing regulatory standards across different regions.1

Mixed Signals for US Manufacturing

The May 2024 Manufacturing ISM® Report reveals a continued contraction in the U.S. manufacturing sector, with the Manufacturing PMI® at 48.7%, representing the 18th time in the last 19 months. New orders and production indexes remained in contraction while employment expanded. Fabricated metal and chemical products are the largest manufacturing industries that registered growth. The report indicates mixed signals, with some positive trends emerging amidst ongoing challenges.2

Private Equity Firm Apollo Acquires U.S. Silica

Apollo (NYSE: APO) announced on April 26th their intent to acquire U.S. Silica, a leading industrial minerals company, in a $1.85 billion all-cash transaction. The deal is expected to close in Q3 2024 and values U.S. Silica at $15.50 per share, a 32% premium over the recent closing price. This transaction reflects the ongoing trend of private equity interest in specialized materials sectors, highlighting the strategic value of industrial minerals companies in the current market landscape.3

Manufacturing M&A Poised for Rebound

In H1 2023, M&A deal volumes for industrial manufacturing and automotive sectors have declined compared to H1 2022 and remain slightly lower than H2 2022. However, a recovery in manufacturing deal volumes is expected, driven by new technology and a more stable macroeconomic environment. The automotive sector faced challenges from high interest rates, political uncertainty, and reduced consumer demand but is projected to stabilize or grow as companies adapt to the electric vehicle future.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • SRS Distribution Inc.
  • The Home Depot, Inc.
  • $18,250.00
  • Masonite International Corporation
  • Owens Corning
  • $4,252.38
  • Carlisle Interconnect Technologies Inc.
  • Amphenol Corporation
  • $2,025.00
  • STANLEY Infrastructure, LLC
  • Epiroc AB (publ)
  • $760.00
  • Paperboard manufacturing facility of Graphic Packaging Holding Company
  • Clearwater Paper Corporation
  • $700.00
  • Nehring Electrical Works Company
  • Mueller Industries, Inc.
  • $600.00
  • Industrial Motors and Generators businesses of Regal Rexnord Corporation
  • WEG S.A.
  • $400.00
  • WESCO Integrated Supply, Inc.
  • Vallen Distribution, Inc.
  • $338.30
  • Kataman Metals LLC
  • Pedalpoint Holdings, LLC
  • $254.60
  • Associated Spring and Hänggi businesses of Barnes Group Inc.
  • OEP Capital Advisors, L.P.
  • $175.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • The L.S. Starrett Company
  • MiddleGround Management, LP
  • $136.04
  • Fathom Digital Manufacturing Corporation
    International Corporation
  • CORE Industrial Partners, LLC
  • $46.18
  • Braner USA, Inc.
  • Holleway Capital Partners, LLC
  • n/a
  • Laux Construction, LLC
  • Rival Holdings, Inc.
  • n/a
  • Quality Plumbing & Mechanical LLC
  • CopperPoint
  • n/a
  • TriplePoint MEP Holdings, LLC
  • Stellex Capital Management LLC
  • n/a
  • CNS Microwave, LLC
  • Everest Infrastructure Partners, Inc.
  • n/a
  • Attic Breeze, LLC
  • ArchStar Capital
  • n/a
  • Swanson Industries, Inc.
  • Turnspire Capital Partners LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Redviking Group, LLC
  • Lincoln Electric Holdings, Inc.
  • $115.00
  • Brown Wood Preserving Company, Inc.
  • Koppers Utility and Industrial Products Inc.
  • $100.00
  • 3form, LLC
  • Armstrong World Industries, Inc.
  • $95.00
  • Cryoworks, Inc.
  • Crane Company
  • $61.00
  • DSS Residential Three, Inc.
  • Janus International Group, Inc.
  • $60.00
  • Dynamic Sealing Technologies, Inc.
  • Kadant Inc.
  • $55.00
  • Becnel Rental Tools, LLC
  • Transcat, Inc.
  • $50.80
  • Transco Inc.
  • VAALCO Energy, Inc.
  • $40.20
  • Venshure Test Services, LLC
  • AB Dynamics plc
  • $30.00
  • Timber Technologies, LLC
  • Star Equity Holdings, Inc.
  • $24.10

 

Source S&P Capital IQ as of 7/9/2024 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Ken Sommers

Denver Office

303-276-7985 |

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Michael Poole

Orlando Office

407-621-2112 |

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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. 1. Howe, A. “Supreme Court strikes down Chevron, curtailing power of federal agencies.” Scotus Blog, June 28, 2024.
  2. 2. Fiore, T. “Manufacturing PMI® at 48.7%; May 2024 Manufacturing ISM® Report On Business®.” PR Newswire, June 3, 2024.
  3. 3. “U.S. Silica Enters Into Definitive Agreement to Be Acquired by Apollo Funds for $1.85 Billion.” PR Newswire, April 26, 2024.
  4. 4. Ritchie, M. “Global M&A Trends in Industrials & Services.” PWC, June 25, 2024.
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