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Mike Rosendahl

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Industry Trends

U.S. Crude Oil Stockpiles Decline Amid Lower Production and Imports

U.S. commercial crude oil stockpiles fell by 1.6 million barrels in Q3, totaling 417.5 million barrels, about 4% below the five-year average. This decline was driven by a production drop of 100,000 barrels per day and a 545,000-barrel decrease in imports, influenced by Hurricane Francine's impact on Gulf Coast production. Meanwhile, gasoline and distillate fuel stocks saw slight increases, with gasoline demand rising to 8.8 million barrels per day. Continued supply tightening could lead to price volatility in the crude oil market.1

Industrial M&A Activity Poised for Growth Amid Market Shifts

In the first half of 2024, M&A activity surged in the industrials sector, with 438 transactions, up 18% from 2023. Notable deals include Silgan Holdings' $900 million acquisition of Weener Plastics. Analysts expect momentum to continue into 2025 as uncertainties around interest rates and regulations diminish, encouraging firms to pursue strategic acquisitions and adapt to changing market conditions.2

US Manufacturing PMI Plummets, Sharpest Decline in Over a Year

The S& Global U.S. Manufacturing PMI fell to 47 in September, marking the third consecutive month of contraction and the sharpest decline in over a year. A steep drop in new orders and reduced production have led to job cuts not seen since June 2020. However, easing input inflation signals potential stability ahead. As factories adjust to decreased demand, the outlook remains cautious, suggesting that further adjustments may be necessary in the coming months.3

U.S. Auto Dealers Face Continued Market Weakness as Sentiment Dips

The Q3 2024 Cox Automotive Dealer Sentiment Index dropped to 40, reflecting ongoing challenges for U.S. auto dealers. Franchised dealers showed slight optimism at 50, while independent dealers fell to a low of 37. Economic concerns, high interest rates, and political uncertainty dampen outlooks, with profitability declining to 34. Although electric vehicle sentiment improved, future sales expectations remain pessimistic, indicating a tough road ahead for the market.4

Fed's Bold Rate Cut, A Mixed Bag for Manufacturers

The Federal Reserve cut its key lending rate by 0.5 percentage points, the first reduction since the pandemic. While manufacturers welcomed the news, anticipating lower borrowing costs and improved profitability, experts warn that challenges like workforce issues and rising supplier prices remain. The impact on manufacturing demand is expected to be gradual, with potential increases in equipment financing and inventory management as businesses adjust to the new economic landscape.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • WestRock Company
  • Smurfit Westrock Plc
  • $21,281.42
  • Encore Wire Corporation
  • Prysmian S.p.A.
  • $4,808.56
  • Copeland LP
  • Blackstone Inc.; GIC Private Limited; Abu Dhabi Investment Authority
  • $3,400.00
  • Cupertino Electric, Inc.
  • Quanta Services, Inc.
  • $1,705.00
  • Trachte, LLC
  • nVent Electric plc
  • $695.00
  • North American conventional signalling business
  • Knorr-Bremse AG
  • $665.42
  • Mueller, Inc.
  • Cornerstone Building Brands, Inc.
  • $475.00
  • Wilsonart International Holdings, LLC
  • Clayton, Dubilier & Rice, LLC
  • $398.00
  • Marshall Excelsior Co.
  • OPW Fueling Components Inc
  • $395.00
  • Applied Avionics, Inc.
  • Loar Group, Inc.
  • $385.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Bishop, Inc.
  • Equity Residential
  • $108.00
  • Ascend Elements, Inc.
    International Corporation
  • SKS Private Equity
  • $98.23
  • Business of DWFritz Automation, Inc.
  • Balmoral Funds LLC
  • n/a
  • Scatter Wash Battery Energy Storage Project in Arizona
  • Copenhagen Infrastructure Partners P/S
  • n/a
  • Mobile Naval Yard
  • CapZone Impact Investments LLC
  • n/a
  • Pavement Maintenance Group LLC
  • Renovo Capital, LLC
  • n/a
  • Micromatic, LLC
  • MITAR Private Capital
  • n/a
  • Proenergy Holding Company, Inc.
  • Energy Capital Partners, LLC
  • n/a
  • Southern Tooling Inc.
  • LFM Capital, LLC
  • n/a
  • Tuttle Inc.
  • LFM Capital, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • ODC Construction, LLC
  • Synergos Companies
  • $250.00
  • Ghost Robotics Corporation
  • LIG Nex1 Co., Ltd.; Korea Investment Private Equity
  • $240.00
  • Lamps and Accessories Business of Lumileds, LLC
  • First Brands Group, LLC
  • $238.00
  • Bren-Tronics, Inc.
  • EnerSys Advanced Systems Inc.
  • $208.00
  • Mobile Energy Rentals LLC
  • Solaris Energy Infrastructure, Inc.
  • $199.10
  • Parsec, LLC
  • Universal Logistics Holdings, Inc.
  • $193.60
  • Public carrier wireless telecommunications infrastructure business of Black & Veatch Holding Company
  • Ansco & Associates, LLC
  • $150.00
  • Substantially all the assets of Woolf Distributing Company, Inc.
  • ADENTRA Inc.
  • $135.00
  • L.D. Kichler Co., Inc.
  • Progress Lighting, LLC
  • $125.00
  • Alum-A-Lift, Inc
  • Piab AB
  • $120.00

 

Source S&P Capital IQ as of 10/9/2024 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. Anthony Harrup, “U.S. Crude Oil Stockpiles Fall.” WSJ, September 18, 2024.
  2. 2. Geert De Lombaerde, “Manufacturers Primed for Mergers but Waiting for ‘Forecastability.’” Industry Week, September 4, 2024.
  3. 3. “United States Manufacturing PMI.” Trading Economics, September 3, 2024.
  4. 4. Mark Schirmer, “U.S. Automobile Dealer Sentiment Stumbles in Q3 as Political Climate Heats Up.” Cox Automotive, September 6, 2024
  5. 5. R. Schoenberger, “Manufacturers Cheer Large Interest Rate Cut.” Industry Week, September 18, 2024.
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